Stocks ended the week on cheery note, as earnings news from Microsoft («www.businessweek.com») and Countrywide Financial («www.businessweek.com») helped push the major indexes up by at least 1% despite record oil prices and the weak dollar. Shares of oil companies also bounced up, helping fuel Friday’s rally.

Investors were also cheered by a newspaper report that Merrill Lynch («www.businessweek.com») could be in for new leadership after its CEO allegedly angered his board members by discussing a major merger without their knowledge.

On Friday, the Dow Jones industrial average rose 134.78 points, or 0.99%, to 13,806.70. The broader S&P 500 index moved up 20.88 points, or 1.38%, to 1,535.28. The tech-heavy Nasdaq composite index jumped 53.33 points, or 1.94%, to 2,804.19.

In the energy markets, December NYMEX crude was up $1.40 per barrel at $91.86, after touching a record $92.22 per barrel in overnight trading. Action Economics says prices are being pushed higher by supply concerns, the weakness of the U.S. dollar and geopolitical concerns in the Middle East, especially new U.S. sanctions on Iran. Meanwhile, gold hit a 27-year-high of $787.50 per ounce, and the dollar’s value fell, reaching $1.44 per euro.

As crude oil pushes ever closer to the $100 mark, higher energy costs could be “very devastating for the consumer,” which makes up 70% of economic activity in the U.S., notes Eric Thorne of Bryn Mawr Trust Wealth Management. So far, however, investors haven’t been focused on oil prices, focusing more on the aftermath of this summer’s financial crisis, Thorne says.

Countrywide Financial («www.businessweek.com»), as the nation’s largest mortgage lender, was hit hard by the recent credit crisis. Yet Countrywide shares shot up 32% after Countrywide announced its quarterly earnings results. Countrywide reported a loss of $2.85 per share in the third quarter, a $1.2 billion loss, but expects to return to profitability in the fourth quarter. Overall, thrifts and mortgage finance companies rose 5.57% on Friday, recovering a fraction of their share prices’ big losses this year.

Microsoft («www.businessweek.com») jumped 9.5% after reporting earnings of 45 cents per share last quarter, up from 35 cents a year ago. Revenue rose 27%, helped by sales of its new Windows operating system software and its “Halo” video game. Microsoft shares, trading around $35, returned to levels not seen since 2001.

Merrill Lynch («www.businessweek.com») shares moved up 8.5% on news that chief executive Stan O’Neal may be on the way out. O’Neal floated the idea of a merger with a large bank, Wachovia («www.businessweek.com»), a foray that angered Merrill’s board, according to people close to the beleaguered Wall Street firm, reports the New York Times. The speculation comes a few days after Merrill reported huge losses from the credit crisis in its quarterly earnings announcement.

Shares of oil and gas refining company Tesoro («www.businessweek.com») jumped 12.7% to $63.83 on word that Tracinda Corp. plans to make a cash tender offer for up to 21.875 million shares of stock at a price of $64.00 per share. The Tesoro deal and the rise in oil prices helped push stocks in the oil and gas refining and marketing industry up 3.3%.

Friday’s session ends a week of wild swings in stock prices as the market reacted strongly to earnings reports, economic data and even rumors. “It seems to be very much a news-driven market right now,” says Randy Frederick, director of derivatives at Charles Schwab. That’s a sign of uncertainty about the economy, he adds: “People are having a hard time getting a read on where this market is headed.”

Also Friday, a survey of consumer confidence showed falling home prices are having an impact on the American mood. “

(02-12) 05:48 PST LOS ANGELES, (AP) —

IndyMac Bancorp Inc. said Tuesday it swung to a fourth- quarter loss as weakness in the housing market forced the mortgage lender to boost its loan-loss provisions to account for growing defaults and foreclosures.

It was the first full-year loss in its 23-year history.

The holding company for IndyMac Bank reported a loss of $509.1 million, or $6.43 per share, for the quarter ended Dec. 31.

That compares with a profit of $72.2 million, or 97 cents per share in the same period a year earlier.

Wall Street analysts surveyed by Thomson Financial expected the company to post a much smaller loss of $1.57 per share.

IndyMac shares tumbled more than 11 percent, or 86 cents, to $6.74 in premarket trading Tuesday.

Chief Executive Michael Perry called 2007 “a terrible year” for the mortgage market because of the deteriorating housing and credit markets. He said IndyMac’s loss was “significant,” but that results were consistent with other large financial institutions.

For the year, IndyMac posted a loss of $614.8 million, or $8.28 per share, compared with a profit of $342.9 million, or $4.82 per share, for the full year 2006.

Net revenue in 2007 tumbled to $3.6 million, compared with $1.3 billion in 2006.

Perry said he expects the company will post a $13 million profit this year.

“Our goal is to return IndyMac to profitability in (the second quarter) and grow our profit each quarter thereafter, and I believe that we have a realistic shot of achieving this goal.”

The company suspended its dividend to boost capital and further gird against credit costs.

The company’s credit costs soared to $863 million during the quarter, up from $46 million in the prior-year period.

At the close of the quarter, credit reserves for future losses totaled $2.4 billion, up 71 percent from $619 million a year earlier.

The Pasadena, Calif.-based company took $179 million in write-offs during the quarter and noted it expects its credit reserves to be sufficient to absorb a “significant” increase in charge-offs this year.

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On the Net:

IndyMac Bancorp Inc.: «www.indymacbank.com»

(02-12) 04:58 PST BARCELONA, Spain (AP) —

Google and Nokia Д the world’s most popular search engine and largest cell phone maker Д said Tuesday that Google’s search engine will be incorporated into Nokia’s search application.

The Google search engine will join Yahoo! and Windows Live, which are already offered. The integration will be rolled out in selected markets with the launch of four new Nokia models announced earlier at the World Mobile Congress.

“This integration allows our consumers the ability to use the innovative search technologies, which have made Google almost synonymous with Internet search,” said Ilkka Raiskinen, vice present for software and services at Nokia.

Google search was previously available on Nokia Internet tablets and last year the Nokia N95 8GB became the first mobile device to fully support the video-sharing platform YouTube, Nokia said in a release.