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US stocks jumped yesterday, capping a tumultuous week, on optimism that giving Fannie Mae and Freddie Mac a bigger role in the mortgage market will ease a credit crunch that claimed Bear Stearns.
Stocks closed out their best week in nearly two months on the strength of financial shares, which bore the brunt of investors' wrath since the credit crisis unfolded last summer.
The benchmark Standard & Poor's 500 gained 2.4 per cent for the day and rose 3.2 per cent for the week. The Dow Jones industrial average was up 2.16 per cent yesterday.
Fannie Mae and Freddie Mac delivered eye-popping gains for a third session, each rising more than 50 per cent since Monday.
Major banks such as Bank of America, JPMorgan and Citigroup rose between 8 to 10 per cent each and the Dow Jones index of home building stocks rose 8.3 per cent.
- REUTERS
