Stocks rose on Monday after the U.S. government released the highly anticipated details of a plan to clean out toxic assets from banks' balance sheets, a key part of the government's efforts to revitalize the recession-hit economy.
Bank shares led the way up, buoyed by the latest plan, which is geared at unlocking tight credit markets with help from private investors. Citigroup
The Treasury Department will kick off the financing for the so-called Public-Private Investment Program with $75-$100 billion out of the $700 billion financial bailout fund approved by Congress last fall.
At least there's a plan moving forward. There is a sign of movement, which I would take as encouraging, said Peter Jankovskis, director of research at OakBrook Investments LLC, in Lisle, Illinois.
It's just a question of how effective that policy will be, said Jankovskis, who noted that the plan's reliance on private participation could be a hurdle.
The Dow Jones industrial average <.DJI> rose 206.60 points, or 2.84 percent, to 7,484.98. The Standard & Poor's 500 Index <.SPX> gained 24.06 points, or 3.13 percent, to 792.60. The Nasdaq Composite Index <.IXIC> put on 41.76 points, or 2.87 percent, to 1,499.03.
Treasury Secretary Timothy Geithner gave a broad outline of the plan last month, but investors panned it as being light on details and stock markets fell to 12-year lows.
However, stocks have rallied off those lows in recent weeks, spurred by the government's aggressive moves to shore up the economy as well as positive comments from some major banks about their performance outlooks.
Adding to the positive tone, data showed the pace of existing home sales rose 5.1 percent in February, the biggest increase since July 2003. The Dow Jones index of home builders <.DJUSHB> was up 4.6 percent shortly after the data was released.
A large merger deal in the energy sector and rising oil prices helped buoy shares of oil companies with Exxon Mobil
Canada's No. 2 oil company Suncor Energy
Upscale jeweler Tiffany & Co
Also on the earnings front, shares of Walgreen Co
(Editing by Chizu Nomiyama)