Updated at 4:15 p.m. ET: Wall Street closed its best third quarter since 2010 Friday after a wave of central bank actions sparked a dramatic reversal in equity markets.
The Dow Jones industrial average closed Friday down 49 points, but up 4 percent for the third quarter.
Other market indexes also closed the quarter with solid gains. The Standard & Poor's 500 Index and the Nasdaq Composite Index both added 6 percent.
The S&P 500 is down 1 percent for the week -- its second consecutive weekly decline and worst weekly percentage drop since early June, as markets have struggled to find traction to the upside after the Federal Reserve's latest stimulus plan so far was announced on September 13.
The benchmark S&P 500 has now notched up a yearly advance of about 15 percent.
Stocks fell on Friday after investors sold shares to lock in gains at the end of equities' robust third quarter and as Spanish banks' stress tests were mostly within expectations.
An independent audit of Spain's 14 main banks showed they need 59.3 billion euros ($76.3 billion) in extra capital to ride out a serious economic downturn, nearly matching expectations.
However, Moody's review of Spain's credit rating, due later in the day, could add to the nation's challenges in dealing with its debt.
"All Europe, all day, every day for months has been an issue for the markets. and you see what the progress of the returns has been -- it has mostly been around ECB and Fed intervention announcements," said Hugh Anderson, managing director at HighTower Advisors in Las Vegas, Nevada.
"The rest of the time, the fundamentals come to the fore and grind the market back down."
Investors also grappled with another round of disappointing domestic economic data, following a weaker-than-expected read on the Institute for Supply Management-Chicago's index of Midwest business activity, which fell to 49.7 in September from 53.0 in August.
The final read on the Thomson Reuters/University of Michigan survey on consumer sentiment was also less than expected, though it advanced to its highest in four months.
U.S. consumer spending rose in August by the most in six months as households stretched to pay for higher gasoline prices, according to a Commerce Department report.
Recent protests in Greece and Spain against austerity plans have also heightened investors' concerns as the turmoil could impede political maneuvering.
Elsewhere in the tech arena, U.S.-listed shares of Research in Motion jumped a day after a smaller-than-expected quarterly loss.
Nike Inc warned of slowing orders in China, becoming the latest company to sound a note of caution about how economic weakness in the world's second-largest economy was affecting its business.
Reuters contributed to this report.
