Stocks moved sharply higher over the course of the trading day on Monday, with the major averages more than offsetting the losses posted in the two previous sessions to reach their best levels in over a month. The standout gains came after the Obama administration revealed its plan to help banks sell toxic assets.

The plan unveiled by Treasury Secretary Timothy Geithner will set up an investment fund to buy mortgage-related securities and other assets that are hurting the balance sheets of banks. The new Public Private Investment Program would combine taxpayer money with private funds, aiming to buy loans and free up banks to renew lending.

Geithner's plan involves using up to $100 billion in funds from the $700 billion financial rescue plan passed in 2008 in addition to capital from private investors to generate an estimated $500 billion to purchase the toxic assets, a number that could double to $1 trillion over time.

While stocks moved sharply higher on the news, Hugh Johnson, chief investment officer for Johnson Illington Advisors, expressed a little bit of skepticism about Geithner's bad asset program in an interview with RTT News.

I don't know if it can do the trick - I have my doubts, Johnson said. He added, There's no question that the plan is positive and to some extent will certainly help strengthen bank balance sheets, but he emphasized that until we see a recovery in loan demand, it's not likely to lead to a big increase in lending as well as a recovery in the economy.

Nonetheless, the major averages accelerated to the upside going into the close, ending the session at or near their best levels of the day. The Dow closed up 497.48 points or 6.8 percent at 7,775.86, the Nasdaq closed up 98.50 points or 6.8 percent at 1,555.77 and the S&P 500 closed up 54.38 points or 7.1 percent at 822.92.

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