Markets Push Higher for a Second Day

U.S. stocks posted the biggest two- day rally since 1987 after the government said it will guarantee $306 billion of troubled Citigroup Inc. assets and lawmakers pledged to pass another economic stimulus package.

Citigroup, which lost 60 percent of its market value last week, rebounded 58 percent after the Treasury also agreed to inject $20 billion into the company. JPMorgan Chase & Co. and Bank of America Corp. jumped more than 21 percent, sending the Standard & Poor’s 500 Financials Index to a record gain, as the government rescue boosted confidence in the banking system. Home Depot Inc. and General Electric Co. climbed more than 8 percent on speculation a new stimulus will spur economic growth.

The S&P 500 added 6.4 percent to 851.31, capping a two-day gain of 13 percent. The Dow Jones Industrial Average climbed 388.68 points, or 4.8 percent, to 8,435.1. The Nasdaq Composite rose 6.3 percent to 1,472.02. Europe’s Dow Jones Stoxx 600 climbed 8.4 percent, while the MSCI Asia Pacific Index slipped 0.7 percent.

European stocks rose the most in six weeks after the U.S. government guaranteed $306 billion of troubled Citigroup Inc. assets and Democratic lawmakers pledged a stimulus package for the world's largest economy by January.

The Dow Jones Stoxx 600 Index 8.4 percent to 197.51, rallying from a five-year low. Stocks extended early gains after U.S. President George W. Bush said he's prepared to make other rescues like the one to help Citigroup and U.K. Chancellor of the Exchequer Alistair Darling pledged 20 billion pounds ($30 billion) of tax cuts and spending to spur growth.

National benchmark indexes gained in all 18 western European markets. The FTSE 100 rose 9.8 percent as Anglo American Plc and BP Plc climbed. Germany's DAX added 10 percent, with Hypo Real Estate Holding AG surging 21 percent on a government debt guarantee. France's CAC 40 increased 10 percent.

Most Asian markets fell today, with Japan shut for a holiday. The MSCI Asia Pacific excluding Japan Index lost 0.6 percent to 205.19 as of 6:54 p.m. in Hong Kong. Financial stocks were the biggest drag. The gauge is down 61 percent this year, leaving it at 8.7 times estimated profit, about half its valuation at the start of 2008.

Australian gold mining stocks climbed after the price of the metal jumped. The S&P/ASX 200 Index rose 0.3 percent to 3,425.1 at the close of trading in Sydney, paring its decline this year to 46 percent and extending Friday's rebound from a five-year low.

China’s stocks fell for a third day, led by airlines, after the nation’s largest international carrier said fuel hedging losses tripled. Developers retreated on speculation interest rates may stay unchanged. The CSI 300 Index, declined 83.09, or 4.3 percent, to 1,837.64 at the close.

India's Sensitive Index fell, with ICICI Bank Ltd. leading financial shares lower after JPMorgan Chase & Co. cut its earnings estimates for lenders. It slid 12.09, or 0.1 percent, to 8,903.12., Bloomberg
11/24/2008 1:24:12 PM