SLM Corp., the student lender known as Sallie Mae, rallied 29 percent, while CIT Group Inc., the commercial-finance company, jumped 24 percent as the Fed said the funds will be used to purchase mortgage-related debt and support loans to consumers and small businesses. Citigroup Inc. climbed 8.1 percent after its chief financial officer said the bank has no need to sell assets in order to conserve capital.
The Standard & Poor’s 500 Index gained 1.2 percent to 862.4 at 10:32 a.m. in New York. The Dow Jones Industrial Average rose 113.26, or 1.3 percent, to 8,556.65. The Nasdaq Composite Index fell 0.5 percent to 1,464.37 after Analog Devices Inc.’s forecasts for sales and profit fell short of analyst estimates.
Most European stocks rose on signs central banks will take further steps to revive the economy and keep the financial system from collapsing, Asian shares advanced.
The Dow Jones Stoxx 600 Index added 1.8 percent to 201.01 at 3:19 p.m. in London. The gauge yesterday advanced 8.4 percent, the most in six weeks, after the U.S. guaranteed $306 billion of troubled Citigroup Inc. assets and lawmakers pledged a stimulus package for the world's largest economy.
Even after the gains, the Stoxx 600 is down 45 percent in 2008, headed for its worst year on record, as credit losses and writedowns approach $1 trillion in the worst financial crisis since the Great Depression.
National benchmark indexes rose in all 18 markets in western Europe except Iceland. The FTSE 100 gained 1.6 percent, led by BHP Billiton Ltd. after the company abandoned a plan to buy Rio Tinto Group. Germany's DAX rose 1.8 percent. France's CAC 40 increased 2.2 percent, with Remy Cointreau SA climbing on better-than-expected earnings.
Japan stocks climbed the most in two weeks, led by real estate and financial companies, on speculation the U.S. government’s rescue of Citigroup Inc. will calm credit market turmoil and foster lending growth. The Nikkei 225 Stock Average rose 413.14, or 5.2 percent, to close at 8,323.93 in Tokyo.
Australia’s benchmark stock index rose the most in 11 years as the U.S. government’s rescue of Citigroup Inc. boosted confidence in the global financial system. The S&P/ASX 200 Index climbed for a third-straight day, gaining 198.30 points, or 5.8 percent, to 3,623.40 at the close in Sydney, the most since Oct. 29, 1997.
Indian stocks declined, with the benchmark index reversing earlier gains, as selling by overseas funds overwhelmed investor optimism about the U.S. government's rescue of Citigroup Inc. India's benchmark Bombay Stock Exchange Sensitive Index, or Sensex, fell 207.59, or 2.3 percent, to 8,695.53.