Stocks Gain After Pullback - NYTimes.com Stocks on Wall Street advanced modestly on Friday, as gains in banking shares helped the Standard & Poor's 500 index rebound from its second-worst decline of the year. The index dropped 2.2 percent on Thursday as evidence mounted of slowing manufacturing growth worldwide, a threat to corporate profits. "Definitely a bounce here, although it is simply a reaction to how sharp the sell-off was yesterday," said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, N.Y. Bank shares rose after Moody's Investors Service downgraded 15 of the world's biggest banks on Thursday, lowering credit ratings by one to three notches to reflect their risk of losses from volatile capital market activities. Morgan Stanley added 1 percent and Bank of America rose 1.2 percent, as many of the ratings cuts weren't as deep as expected. The KBW Bank index gained 0.8 percent. "The banking world is undergoing a major transformation and a lot of questions about the concept of 'too big to fail' and all of that," Mr. Ghriskey said, "so I'm not surprised to see the new rating levels - ratings agencies are always backward looking and that is what that reflects." After falling for two consecutive sessions, the S.&P. 500 is down 0.9 percent for the week, but remains on track for its first monthly gain in three months. In morning trading, the Dow Jones industrial average gained 0.6 percent, the S.&P. 500 climbed 0.5 percent and the Nasdaq composite index advanced 0.6 percent. European shares extended the previous session's losses triggered by poor macroeconomic data. The Euro Stocc 50 was flat, while the FTSE 100 in Britain fell 0.7 percent and the DAX in Germany lost 0.7 percent. The leaders of Germany, France, Italy and Spain met in Rome on Friday to find ways to restore confidence in the euro zone ahead of a full European Union summit next week, which Italy's prime minister called a defining moment.