Market climbs on retailers and financials-

Stocks rose on Friday as the kickoff to the holiday shopping season lifted retail stocks such as Target (TGT.N: Quote, Profile, Research), while signs of progress in a plan to relieve credit market strain helped major banking stocks .

Shares of JPMorgan Chase (JPM.N: Quote, Profile, Research) were leading the Dow higher. The bank, along with Bank of America (BAC.N: Quote, Profile, Research) and Citigroup (C.N: Quote, Profile, Research), is spearheading an effort to raise billions of dollars for a new fund to ease jitters in the credit market, the Wall Street Journal reported.

U.S. financial markets were closed on Thursday for Thanksgiving, while on Wednesday stocks fell sharply on the latest signs of weakness in the credit market and housing sector.

"I think we're entitled to some sort of rebound. One piece of good news is that the banks are making progress with the rescue attempt" to help structured investment vehicles, said Michael Metz, chief investment strategist at Oppenheimer & Co. "But I wouldn't read too much into it because it may be more a case of the sellers leaving early for the day."

The Dow Jones industrial average (.DJI: Quote, Profile, Research) was up 111.36 points, or 0.87 percent, at 12,910.40. The Standard & Poor's 500 Index (.SPX: Quote, Profile, Research) was up 15.69 points, or 1.11 percent, at 1,432.46. The Nasdaq Composite Index (.IXIC: Quote, Profile, Research) was up 17.29 points, or 0.67 percent, at 2,579.44.

The New York Stock Exchange will close early at 1 p.m. on Friday.

JPMorgan shares were up 3.3 percent to $42.02. Bank of America stock was up 2.4 percent to $43.13 and Citigroup stock climbed 2.7 percent to $31.57.

Consumers, many with the day off from work, kicked off the holiday shopping season, some visiting stores before dawn. Chains refer to the day after Thanksgiving as "Black Friday" because it once marked the day many retailers turned a profit and went into the black for the year.

Shares of JC Penney (JCP.N: Quote, Profile, Research), which last week cut its forecast for the holiday season, were up 2.4 percent to $41.01. Target's stock was up 4.7 percent to $56.62.

Boeing's (BA.N: Quote, Profile, Research) stock rose after the chief executive of Airbus, Boeing's chief rival, said the weakness of the dollar is "life-threatening" for the European aircraft maker. Boeing shares were up 1.4 percent to $88.67.

UAL (UAUA.O: Quote, Profile, Research), the parent of the No. 2 U.S. air carrier United Airlines, is interested in a possible merger, according to a BusinessWeek article citing industry experts. Shares of UAL were up 3.2 percent to $40.26 on the Nasdaq.

Mortgage and bond insurers rose after two French financial institutions agreed to provide funds to bond insurer CIFG.

Shares of bond insurer MBIA (MBI.N: Quote, Profile, Research) were up 7.7 percent to $34.65 and AMBAC Financial (ABK.N: Quote, Profile, Research) rose 6.9 percent to $25.83. Shares of No. 1 U.S. mortgage insurer MGIC Investment (MTG.N: Quote, Profile, Research) were up 5.9 percent to $20.68.

Inside Track: Fred Thompson's Defense Diatribe

Republican presidential candidate Fred Thompson may have set a modern record for the amount of sloppy thinking on defense policy in a single speech. In remarks at the Citadel on Tuesday, Thompson proposed measures for a "revitalized" national defense.

The chief "pillar" of Thompson's proposal is that the United States should not spend less than 4.5 percent of its gross domestic product on defense—not including the vast sums committed each year for the wars in Iraq and Afghanistan. Another crucial pillar is that the U.S. should expand Army and Marine Corps to form a "million-member" force.

4.5 percent of GDP is an astonishingly large sum. The U.S. already spends as much on the military as the rest of the world combined, but even that vast outlay apparently does not satisfy Thompson and others who want to lavish more money on the Pentagon. Under his plan—and a similar scheme advanced by the Heritage Foundation earlier this year— the U.S. military budget would soar by nearly $100 billion. The total would approach $600 billion—plus at least another $150 billion for Iraq and Afghanistan. Worse, the 4.5 percent figure is a floor; the actual defense budget of a Thompson administration could be even more.

Thompson's approach turns proper defense budgeting on its head. Instead of crafting a defense strategy and then determining how much we need to spend to implement it, Thompson picks an arbitrary budget figure. He would apparently decide on policy priorities later.

To the extent he thinks about the specifics of security strategy at all, Thompson uncritically accepts all of Washington's current defense commitments. But there are numerous obligations that reek of obsolescence. Why, for example, does the United States need to keep nearly 100,000 troops in Europe more than 15 years after the collapse of the Soviet Union?

Thompson’s defense proposal is a case study in faulty thinking about important security issues.

Similarly, why do we need to retain our security commitment to South Korea? When we made that pledge, South Korea was an impoverished country incapable of defending itself, and the Korean peninsula was only one theater in America's global struggle against communism. Today, South Korea has twice the population and an economy 40 times bigger than that of its North Korean rival. It seems absurd on its face to continue subsidizing the defense of such a prosperous and capable country -- especially when it is no longer part of a global security rivalry.

Yet there is no hint in Thompson's defense manifesto that he is willing to consider terminating—or even downsizing—such obsolete commitments. Setting military spending at so high a level spares policymakers from having to make decisions about priorities. Instead, it encourages complacent, lazy thinking about strategy.

The second crucial pillar of Thompson's proposal—the million-member ground force— may be even more worrisome than the overall spending figure. Due to its geographic position and technological prowess, America needs to focus on air and naval power to protect its legitimate security interests. A large ground force makes little strategic sense. The United States is not likely to wage a ground war against China, Russia or any other conceivable major strategic adversary.

Consequently, a million-member ground force is superfluous, unless Thompson is contemplating involving the United States in additional Iraq-style nation-building missions. But that is the last thing America needs to do. We have already spent a tragic amount of blood and treasure—nearly 3,900 casualties and well over $500 billion—in the Iraq misadventure. For the United States to pursue similar missions in the future would be an exercise in foreign policy masochism.

Thompson's defense proposal is a case study in faulty thinking about important security issues. Throwing money at the Pentagon, complacently accepting a host of obsolete commitments to free-riding allies and embracing the folly of nation building is not what the next administration needs to do.