US STOCKS-Wall St rebounds, erases week's losses with Russia news
* End of Russian military drills near Ukraine border lifts markets
* S&P gains, posts best day since March 4
* VIX falls 5.7 pct
* Indexes up: Dow 1.1 pct, S&P 1.1 pct, Nasdaq 0.8 pct (Updates to close, changes prices, adds comment)
By Akane Otani
NEW YORK, Aug 8 (Reuters) - The S&P and Dow both posted their best day since March on Friday, with the market buoyed by news that Russia was ending military drills near the Ukrainian border, while investors overlooked U.S. air strikes in Iraq.
The gains helped major averages erase the week's losses as buying intensified as the day came to a close. The CBOE market volatility index fell 5.7 percent to 15.71 in a sign of reduced investor uncertainty.
Stocks have been under pressure of late as investors, worried about high valuations and uncertainty around the world, pulled back from riskier assets. Before Friday's rally, the S&P 500 had given up more than 4 percent while the small-cap Russell was down 7 percent over the past four weeks.
Markets rallied after Russia's Defense Ministry said Friday it had finished military exercises in southern Russia, which the United States had criticized as a provocative step amid the Ukraine crisis. Continuación...