CALDEIRÃO DE BOLSA

U.S. Stocks Rally on Fed's Plan to Lend Up to $200 Billion
By Eric Martin

March 11 (Bloomberg) -- U.S. stocks rallied the most in five years after the Federal Reserve said it will pump $200 billion into the financial system to shore up banks battered by mortgage-related losses.

Washington Mutual Inc. climbed the most since 2000 on speculation the largest savings and loan will get a cash infusion from an outside investor. Citigroup Inc., Wells Fargo & Co. and Bank of America Corp. led the Standard & Poor's 500 Financials Index to its biggest gain in eight years on expectations the Fed's move will spur lending. All 10 industry groups in the S&P 500 rose except for health-care companies. Stocks in Europe and Asia gained.

The S&P 500 added 47.28 points, or 3.7 percent, to 1,320.65, trimming its decline for the year to 10 percent. The Dow Jones Industrial Average surged 416.66, or 3.6 percent, to 12,156.81. The Nasdaq Composite Index increased 86.42, or 4 percent, to 2,255.76. Eleven stocks gained for every one that fell on the New York Stock Exchange.

``It's like they're putting jumper cables onto a battery to kick-start the credit market,'' said Nick Raich, who helps manage $34 billion at National City Private Client Group in Cleveland. ``They're doing their best to try to restore confidence.''

Rebound

The S&P 500 rebounded from the lowest level since August 2006 as 479 of its members advanced. Treasuries fell, pushing two- and five-year note yields up the most since 2004, as investors dumped holdings of government debt and bought stocks. The dollar rose the most in six months against the yen and rebounded from a record low versus the euro.

Health-care shares declined after WellPoint Inc., the second-biggest health insurer, cut its forecast because of costlier medical claims and a bad flu season.

Citigroup, the largest U.S. bank, rallied $1.80 to $21.49. Bank of America, the second-biggest, climbed $2.41 to $37.72. Wells Fargo, the No. 5, added $2.93 to $30.82.

Financial shares in the S&P 500 gained 7.4 percent as a group and rebounded from the lowest level since May 2003.

The Fed said it plans to lend Treasuries in exchange for mortgage-backed securities and other debt that has plunged in value as homeowners defaulted on their payments. Banks around the world have posted $188 billion in writedowns and credit losses stemming from the collapse of the subprime-mortgage market. The S&P 500 Financials Index had lost 20 percent this year through yesterday.

The Fed will lend Treasuries for 28-day periods to the 20 banks and securities firms that trade directly with the central bank. Policy makers said they anticipated the so-called primary dealers will lend the Treasuries to other firms in return for cash, helping the dealers shore up their balance sheets.

Fannie Mae, Washington Mutual

Fannie Mae, the biggest provider of financing for U.S. mortgages, added $2.19 to $22. Freddie Mac, the second-largest, rose $2.77 to $20.16. Countrywide Financial Corp., the biggest U.S. mortgage lender, climbed 75 cents to $5.11.

Washington Mutual added $1.84, or 18 percent, to $11.88.

``A potential capital infusion by Warren Buffett and Goldman Sachs is the rumor,'' said Mike Capitani, head of equity trading at Caris & Co. in New York. ``Buffett's always looking for a bottom on things and he's flush with cash.''