Citigroup's billions in losses could have been worse, so the Dow surges. But with recession likely, some investors question the market's resilience. Stocks powered ahead Friday, lifting the Dow index to a three-month high on growing optimism that the worst of the credit crisis is past.

Mutual funds are selling stocks and hoarding cash just as trading surges to a record and prices grow more volatile than at any time since the Great Depression.

The Dow surges 2.2%, its biggest one-day percentage gain in more than four years.