New York, Jun 23 (IANS): US stocks closed higher Friday after a huge sell-off in the previous session, boosted by the financial sector despite multiple credit ratings downgrades by Moody's.

Ratings agency Moody's Thursday downgraded 15 financial institutions, including several large US banks. However, the market had fully anticipated the move.

The financial stocks Friday rallied strongly by more than 1 percent, as investors ignored the downgrade actions, reports Xinhua.

Also providing support, the European Central Bank said it would soon accept a wider range of collateral for loans, including lower rated securities and some asset-backed debt secured by car loans as well as consumer and commercial mortgages.

The announcement was the central bank's latest effort to help ease European banks' funding stresses.

However, Germany's closely-watched Ifo index of business confidence hit a two-year low in June, raising concerns that the eurozone's biggest economy might lose steam in the future.

The Dow Jones industrial average gained 67.21 points, or 0.53 percent, to close at 12,640.78. The Standard & Poor's 500 was up 9. 51 points, or 0.72 percent, to 1,335.02. The Nasdaq Composite Index rose 33.33 points, or 1.17 percent, to 2,892.42.