U.S. stocks rallied after the market's worst week in 75 years, boosted by the government's plan to buy stakes in banks and a Federal Reserve-led push to flood the global financial system with dollars.
The Standard & Poor's 500 Index added 49.88, or 5.6 percent, to 949.1 at 10:32 a.m. in New York. The Dow Jones Industrial Average rose 441.65, or 5.2 percent, to 8,892.84. The Nasdaq Composite Index advanced 91.01, or 4.5 percent, to 1,740.52. Nine stocks gained for each that fell on the New York Stock Exchange.
The Dow Jones Stoxx 600 Index rebounding from its worst week on record, as governments in Europe, the U.S. and Asia agreed to support banks. The Stoxx 600 advanced 8.5 percent to 222.65 at 4:04 p.m. in London. The index has dropped 39 percent in 2008 as concern that frozen credit markets will trigger a recession erased about $28 trillion in value from global stock markets. Financial firms have reported $635 billion in losses and writedowns from U.S. mortgage-related investments since the beginning of last year.
Financial firms have reported $635 billion in losses and writedowns from U.S. mortgage-related investments since the beginning of last year.
Stocks increased after the U.S. Federal Reserve said central banks will offer financial institutions unlimited dollar funds and Europe pledged to guarantee bank debt issues and permit governments to buy stakes and recapitalize some distressed financial companies.
National benchmark indexes in Europe climbed more than 4 percent in 16 of the 17 western European markets that were open. The U.K.'s FTSE 100 jumped 5.3 percent. Germany's DAX advanced 9.3 percent. France's CAC 40 increased 7.7 percent as Total SA gained.
Asian stocks jumped, rebounding from the worst week since at least 1987, on speculation government efforts to support banks will prevent the global credit crisis from worsening.
The MSCI Asia Pacific excluding Japan Index soared 7.3 percent to 272.56 at 6:01 p.m. in Hong Kong, rebounding from last week's 20 percent tumble. Financial stocks accounted for almost half of today's gain. Japan is shut for a holiday.
Australian stocks rallied from the biggest weekly decline in 21 years after Prime Minister Kevin Rudd guaranteed bank deposits and European leaders agreed to shore up lenders, easing funding costs. Australia's S&P/ASX 200 Index jumped 220 points, or 5.6 percent, to 4,180.70 at the close in Sydney, its biggest gain since October 1997, after plunging 16 percent last week.
Indian stocks rose, driving the Sensitive index to its biggest gain in more than four years, as governments around the world stepped up efforts to avert a collapse of the global banking system. The Bombay Stock Exchange's Sensitive Index, or Sensex, rose 781.24, or 7.4 percent, to 11,309.09, its biggest gain since May 18, 2004.