First, the extreme bad news. On Tuesday last week, the Dow Jones Industrial Average closed below 10,000 for the first time in two years, and that same day, Fannie Mae and Freddie Mac, the largest U.S. mortgage-finance companies, lost more than a quarter of their market value, according to Bloomberg. Also, the S&P 500 Financials Index dropped 3%, closing at a level not seen since 1998 and capping its steepest-ever five-day retreat. And, to add insult to injury, Bloomberg reported that the global stock market decline has erased more than $13 trillion in market value since last October.

Now, the good news–investors’ memories can be short! Starting on Wednesday of last week, the Dow rose a total of 4.9% over three days, which was its biggest three-day gain since March 2003. Better than expected earnings from Wells Fargo, JP Morgan, and Citigroup helped fuel the rally. And, speaking of fuel, oil prices declined more than $16 per barrel last week and that helped give support to the markets.

The midweek rally was also boosted by news from the Securities and Exchange Commission on Tuesday that it was placing new temporary restrictions on short-selling the stock of 19 financial companies. This new rule is designed to relieve some of the downward pressure on companies such as Fannie Mae, Freddie Mac, Bank of America, Merrill Lynch, Citigroup, and Lehman Brothers. This is not a recommendation to buy or sell any of these stocks, but it is worth noting that all 19 of the stocks on this list rose in value from Tuesday through the close of trading last Friday.

When the dust settled last week, the Dow was up a much welcome 3.6%. With all this extreme action, it will be interesting to look back six months to a year from now and see if last week was a turning point or just another crazy week in this unpredictable stock market.