Stocks rallied after Hosni Mubarak resigned as president of Egypt and the Obama administration announced plans to dissolve Fannie Mae and Freddie Mac

The Dow Jones Industrial Average, which was down almost 50 points at one point early in the session, gained 43.97 points, or 0.36 percent, at 12,273,26, its highest close since June 2008. The S&P 500 index climbed 7.28 points, or 0.55 percent, to 1,329.15. The Nasdaq composite index gained 18.99 points, or 0.68 percent, to 2,809.44.

Nokia (NYSE: NOK) plunged 14.20 percent after the mobile phone maker said it will enter into a strategic alliance with Microsoft (Nasdaq: MSFT) and would likely slash many jobs in Finland and elsewhere.

Bonds gained as the 10-year Treasury yield slipped to 3.65 percent.

Oil futures dropped 1.48 percent, while gold futures slipped modestly.