U.S. stocks rallied Tuesday, the first day of the second quarter, after two banks hit by the credit crisis move towards raising cash, and UBS AG disclosed new write-downs totaling around $19 billion, with UBS and Lehman Brothers Holdings Inc. offering for sale between them $18 billion in equity.
Swiss bank UBS AG announced its chairman, Marcel Ospel, had quit and it will issue up to $15 billion in new stock. The bank also said it will make $19 billion in write-down due to additional declines in the value of its mortgage assets and other credit instruments, following an $18 billion write-down in 2007.
The announcement comes after U.S. investment bank Lehman Brothers Holdings Inc. said late Monday it would sell 3 million convertible preferred shares due to investor interest.
The Dow Jones industrial average rose249.80, or 2.04 percent, to 12,512.69 at 10:37 in New York.
Broader stock indicators also gained sharply. The Standard & Poor's 500 index rose 46.93, or 1.94 percent, to 1,348.41, and the Nasdaq composite index rose 25.71, or 2.06 percent, to 2,326.03 .
Commodities prices came under pressure as the dollar showed strength against major currencies.