By Anora Mahmudova, Carla Mozee and Victor Reklaitis, MarketWatch

Tekmira surges on FDA moving closer to Ebola drug approval

Tekmira surges on FDA moving closer to Ebola drug approval

NEW YORK (MarketWatch)--Wall Street rallied Friday as investors took heart from news reports that Russia ended military exercises on the Ukrainian border and largely brushed off news of U.S. airstrikes in Iraq.

War Central: Live updates on Iraq, Ukraine and Gaza

Friday's gains erased what would have been weekly losses for the main benchmarks.

The S&P 500 (SPX) rose 16 points, or 0.9%, to 1,926.11 and was set to finish the week roughly where it started it. The Dow Jones Industrial Average (DJI) jumped 144 points, or 0.9%, to 16,512.64 and was 0.3% higher over the week. The Nasdaq Composite (RIXF) gained 30 points, or 0.7%, to 4,365.58 and was set to record a modest weekly gain.

The Russell 2000 (RUT) rose 11 points, or 1% and was on track for a weekly gain of 1.4%, outperforming large-cap stocks.

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Headlines from Russia and the Middle East dominated news. Stock futures fell in early premarket trade, but the flight to haven assets receded after Russian news agency RIA said Russia is seeking to de-escalate tensions with Ukraine. On Thursday, Russian President Vladimir Putin had hit back with sanctions against the countries that have placed trade and restrictions on Moscow.

Meanwhile, the U.S. military has struck ISIL artillery that had been used against Kurdish forces defending Erbil, the Pentagon said Friday.

"Equities are likely to trade sideways throughout August and be driven by geopolitical headline news," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. "From a technical standpoint, it is a good time to add to positions as we do not expect a 10% correction at this point."

In the Middle East, Israel said Hamas had violated a 72-hour cease-fire and ordered the military to resume fire in the Gaza Strip.

Individuals stock moves

On the data front, a report on U.S. labor productivity in the second quarter showed a 2.5% rise, beating the 1.7% gain expected by economists polled by MarketWatch.

Among individual stocks, Tekmira Pharmaceuticals Corp. (TKMR) surged 39% after the Canadian drug maker said Thursday U.S. regulators are moving closer to approving its anti-Ebola drug for use on those infected with the deadly disease.

Gap (GPS)climbed 5.9% after the apparel retailer's same-store sales increased 2% in July, topping analysts' expectations.'

Sotheby's (BID) dropped 8% after the auction-house's second-quarter profit dropped 15%, missing Wall Street's expectations.

Zynga shares (ZNGA) fell 5.5% after the online social-gaming company late Thursday reported that its second-quarter loss had widened to $62.5 million, or 7 cents a share. (Read more about notable stock moves here: http://www.marketwatch.com/story/zynga-plummets-tesla-falls-short-of-record-2014-08-07.)

In other markets, oil futures (CLU4) ticked up, and gold futures (GCZ4) eased. The 10-year U.S. Treasury note's yield recovered to 2.4% after Russia news. European stocks closed lower.

Investors had sought safety in the Japanese yen (USDJPY), and that push higher for the currency led to a 3% dive in Japanese stocks.

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