D.R. Horton Inc. rallied 38 percent to lead homebuilders in the S&P 500 to a 20 percent gain as the Fed announced the new funds. SLM Corp., the student lender known as Sallie Mae, and CIT Group Inc., the commercial-finance company, jumped more than 20 percent. Cisco Systems Inc. and Hewlett-Packard Co. led a decline in technology companies, limiting the market’s advance, on concern the recession will hurt demand.
The S&P 500 added 0.7 percent to 857.4, extending its rebound from an 11-year low on Nov. 20 to 14 percent. The Dow Jones Industrial Average increased 0.4 percent to 8,479.86. The Nasdaq Composite Index slipped 0.5 percent to 1,464.73. Almost two stocks rose for each that fell on the New York Stock Exchange.
European stocks rose for a second day, led by financial firms and builders, after the Federal Reserve announced new efforts to unfreeze credit for homebuyers, consumers and small businesses.
The Dow Jones Stoxx 600 Index added 0.7 percent to 198.79. 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.
National benchmark indexes rose in 16 out of 18 markets in western Europe. The FTSE 100 gained 0.4 percent, led by BHP Billiton Ltd. after the company scrapped a plan to buy Rio Tinto Group. Germany's DAX added 0.1 percent. France's CAC 40 increased 1.2 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.