US STOCKS-Wall St rebounds on news Russia ending drills

* Major indexes at session high after Russia report

* Tekmira jumps as FDA modifies Ebola treatment status

* Indexes up: Dow 0.9 pct, S&P 1.0 pct, Nasdaq 0.7 pct (Updates prices, changes comment)

By Akane Otani

NEW YORK, Aug 8 (Reuters) - U.S. stocks rose Friday, with major indexes hitting session highs and erasing losses from the week, buoyed by news that Russia was ending military drills near the Ukrainian border that the U.S. had rapped as being "provocative."

The market had dropped in post-market futures trading a day earlier on worries over the implications of a U.S. air strike on Iraq. That came amid a backdrop of retaliatory trade bans by Russia on U.S. and European food imports, which posed concerns especially for Europe's fragile economic recovery.

The S&P 500 rose 0.95 percent and climbed above its 100-day moving average, a technical support level that it had been hovering near for the past several days. The CBOE market volatility index fell 5.1 percent to 15.81 in a sign of reduced investor uncertainty.

Russia's Defence 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.

The U.S. carried out air strikes targeting Islamic State fighters marching on Iraq's Kurdish capital earlier Friday. The strikes were the first authorized on Iraq since President Barack Obama pulled American troops out in 2011.

"The market hates uncertainty, and when it doesn't have enough information about how badly an event could impact the economy, it tends to take the worst-case scenario and people sell off," said Malcolm Polley, president and chief investment officer of Stewart Capital Advisors in Indiana, Pennsylvania.

"With the news of the de-escalating in Russia, and also with the administration saying exactly what they are doing in Iraq, it's helped clear up some uncertainty in the market."

The Dow Jones industrial average was up 153.45 points, or 0.94 percent, to 16,521.72, the S&P 500 was up 17.48 points, or 0.92 percent, to 1,927.05 and the Nasdaq Composite is adding 31.80 points, or 0.73 percent, to 4,366.77.

Strong earnings lifted Nvidia Corp shares 7.5 percent to $18.78. The graphics chipmaker reported higher fiscal second-quarter earnings and gave a forecast for current-quarter revenues that exceeded Wall Street's estimates.

Monster Beverages Corp shares were another big gainer, moving up 6.3 percent to $69.22 after the energy drinks maker posted better-than-expected second-quarter revenue and profit.

Gap Inc continued its rise from after-hours trading on Thursday, jumping 5.9 percent to $42.57 on upbeat sales results from July that beat Wall Street expectations.

U.S.-traded shares of Tekmira Pharmaceuticals Corp (NasdaqCM: TKMR - news) surged 38.3 percent to $19.73 on news the U.S. Food and Drug Administration cleared the company's experimental Ebola treatment for potential use in humans.

The Canada-based company's shares rose more than 88 percent between July 18 and the market opening on Friday. World Health Organization officials have warned the Ebola epidemic constitutes an international health risk. (Editing by Bernadette Baum)