NEW YORK (CNNMoney.com) -- Stocks rallied early Monday as investors welcomed the Treasury's much-anticipated plan to buy up at least $500 billion in bad bank assets, seeing it as a key step in stabilizing the financial sector.

The Dow Jones industrial average (INDU) gained 212 points, or 2.9%, about 40 minutes into the session. The S&P 500 (SPX) index rose 24 points, or 3.2%. The Nasdaq composite (COMP) added 42 points, or 2.9%.

"I think the markets are really embracing this step by Geithner and Obama," said Manus Cranny, market analyst at MF Global Spreads in London. "This really is a precipitous moment for the market."

But Cranny warned that Geithner needed to do a better job at delivering his plan than he has in the past, to avoid spoiling the rally.

"[Geithner's] last delivery was patchy at best, both in terms of style and substance," said Cranny. "He needs to look and sound a lot more confident about what he's tabling to us."

Treasury plan: The U.S. government said late Sunday that it will initially commit up to $100 billion to subsidize private investors' purchase of banks' so-called toxic assets, which have led to the seizure of the credit markets.

"Over time, by providing a market for these assets that does not now exist, this program will help improve asset values, increase lending capacity by banks, and reduce uncertainty about the scale of losses on bank balance sheets," Geithner wrote in an op-ed in the Wall Street Journal.

The aim of the public-private partnerships is to buy up at least $500 billion of bad assets, and possibly up to $1 trillion over time.

Peter Cardillo, chief market economist for Avalon Partners, said that futures are responding positively to the notion that the Obama administration is "being less hostile toward the private sector."

Economy: Sales of existing homes rose 5.1% in February, according to the National Association of Realtors. Sales were expected to slip to an annual rate of 4.45 million for February, according to a consensus of economist opinion from Briefing.com. Instead they rose to a seasonally adjusted annual rate of 4.72 million million units, up from a rate of 4.49 million in January. Still, February sales were down nearly 5% from year-ago levels.

Deals: Suncor Energy (SU) agreed to buy rival Petro-Canada (PCZ) for about $14.86 billion. The deal will expand the company's oil sand reserves and create Canada's biggest energy company. Suncor shares were little changed, while Petro shares jumped 20% in early trading.

World markets: Stocks around the world rallied as investors awaited full details of Geithner's plan. Japan's Nikkei gained 3.4% while the Hang Seng in Hong Kong surged 4%. In Europe, the FTSE 100, the CAC-40 in France and German's DAX added at least 1% in midday trading.

Oil and money: Oil rose 51 cents a barrel to $52.58. The dollar dipped versus the euro and the British pound, but rose against the yen. 

At 7 a.m. ET, Dow Jones industrial, S&P 500 and Nasdaq 100 futures were sharply higher. Futures measure current index values against perceived future performance and offer an indication of how markets may open when trading begins in New York.

Treasury plan: The U.S. government said late Sunday that it will initially commit up to $100 billion to subsidize private investors' purchase of the so-called toxic assets on bank books that have led to the seizure of the credit markets.

"Over time, by providing a market for these assets that does not now exist, this program will help improve asset values, increase lending capacity by banks, and reduce uncertainty about the scale of losses on bank balance sheets," Treasury Secretary Tim Geithner wrote in an op-ed in the Wall Street Journal.

The aim of the public-private partnerships is to buy up at least $500 billion of bad assets, and possibly up to $1 trillion over time. Geithner will unveil details of the plan at 8:45 a.m. ET.

Peter Cardillo, chief market economist for Avalon Partners, said that futures are responding positively to the notion that the Obama administration is "being less hostile toward the private sector."

"We're headed for a nice open," said Cardillo, adding that an unexpectedly positive housing sales report could further drive the stock markets.

Economy: After the open, investors will focus on the monthly figures for existing home sales. Sales are expected to slip to an annual rate of 4.45 million for February, according to a consensus of economist opinion from Briefing.com. That would be down from the January rate of 4.49 million.

Deals: Suncor Energy (SU) agreed to buy rival Petro-Canada (PCZ) for about $14.86 billion. The deal will expand the company's oil sand reserves and create Canada's biggest energy company.

World markets: Stocks around the world rallied as investors awaited full details of Geithner's plan. Japan's Nikkei gained 3.4% while the Hang Seng in Hong Kong surged 4%. In Europe, the FTSE 100 added 1.7% in early trading. The CAC-40 in France and Germany's DAX were also both up more than 1%.

Oil and money: Oil rose 48 cents a barrel to $52.55. The dollar dipped versus the euro and the British pound, but rose against the yen. 

NEW YORK (CNNMoney.com) -- Stocks managed gains for the second week in a row despite tumbling Friday, as investors pulled back after the recent run.

The Dow Jones industrial average (INDU) lost 122 points or 1.7%. However, it also managed slim gains for the week, rising for the second week in a row for the first time since last May.

The S&P 500 (SPX) index fell 15 points, or 2%. The Nasdaq composite (COMP) fell 26 points or 1.8%.

Stocks fell Friday in a quiet session, with banks and tech leading the retreat.

"We were up sharply in just over a week, so giving something back is to be expected," said Richard Campagna, chief investment officer at brokerage 300 North Capital.

Stocks fell Thursday too after gaining for six of the prior seven sessions. During that run, the S&P 500 rose 17%, as investors keyed off better-than-expected reports on housing and retail sales and some signs of stabilization in the bank sector. Investors also welcomed news Wednesday that the Federal Reserve is pumping another trillion into the economy to try to get credit flowing.

Campagna said that although some of the recent news has been "less bad," it still hasn't been good. "It's not like the world has suddenly changed."

He said that the rally was as much a function of an oversold market as anything else. The gains followed a 28% decline for the S&P 500 that left the benchmark index at a 12-1/2 year low.

The S&P 500 topped 800 both Wednesday and Thursday and that will likely prove to be a key technical level to watch in the weeks ahead, said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research.

"The Fed did what the market wanted on Wednesday, but now we need more leadership coming from Washington," Detrick said. "We need to know more about Geithner's plan for stabilizing the bank sector."

Friday was also the quarterly options exchange, when stock index futures and options and individual stock futures and options all expire at the same time. The process can lead to gyrations in the prices of the underlying stocks.

Detrick said that stocks might see a retreat next week in that the week after a quadruple options exchange has proven to be bearish for the market in recent years.

Economy: Federal Reserve Chairman Ben Bernanke, speaking before a group of community bankers in Phoenix, defended the need to bail out banks seen as "too big to fail," such as AIG. However, he noted that it is an enormous problem that must be addressed.

Sheila Bair, chairman of the Federal Deposit Insurance Corp, also spoke before the same industry group. She said that more regulation is needed to solve the banking crisis. (Full story)

Separately, the government reported that there were 2,769 mass layoffs in February, resulting in 295,477 job cuts. A mass layoff involve 50 or more job cuts at the same time. In January, there were 2,227 mass layoffs.

AIG: The troubled insurer remained in focus after the House of Representatives on Thursday voted to impose a steep tax on large employee bonuses at firms that accepted government bailout money.

The legislation was created in response to the public outcry after AIG (AIG, Fortune 500) handed out over $165 million in bonuses to executives after it accepted more than $170 billion in federal bailout money.

In an interview with CNN Thursday, Treasury Secretary Timothy Geithner said his department was responsible for a provision in the $787 billion stimulus package that allowed AIG and other companies to award bonuses.

AIG shares fell 22% Friday. Other financial stocks falling included Bank of America (BAC, Fortune 500), Citigroup (C, Fortune 500), Wells Fargo (WFC, Fortune 500), Morgan Stanley (MS, Fortune 500) and JPMorgan Chase (JPM, Fortune 500). The KBW Bank (BKX) index fell 5%.

Company news: LM Ericsson (ERIC) warned that it will post a loss in the first quarter due to weaker consumer demand for its phones amid the global financial crisis. Shares fell 10.6%.

Also in the telecom space, Palm (PALM) reported a wider quarterly loss and weaker sales late Thursday that missed analysts' estimates.Despite the loss, shares gained 2%.

Market breadth was negative. On the New York Stock Exchange, losers beat winners by nearly three to one on volume of 2.47 billion shares. On the Nasdaq, decliners beat advancers two to one on volume of 2.52 billion shares.

Bonds: Treasury prices slipped, raising the yield on the benchmark 10-year note to 2.63% from 2.60% Thursday. Treasury prices and yields move in opposite directions.

Lending rates improved. The 3-month Libor rate fell to 1.22% from 1.23% Thursday, while the overnight Libor rate dipped to 0.28% from 0.3% Thursday, according to Bloomberg.com. Libor is a bank-to-bank lending rate.

Other markets: In global trading, Asian markets tumbled and European markets ended higher.

In currency trading, the dollar gained versus the euro and the yen.

U.S. light crude oil for April delivery, which expires on Friday, settled down 55 cents to $51.06 a barrel on the New York Mercantile.

COMEX gold for April delivery fell $2.60 to settle at $956.20 an ounce. 

NEW YORK (CNNMoney.com) -- Stocks slipped Thursday as rising oil and gold prices, a weaker dollar and more dour reads on the economy gave investors a reason to step back after the recent rally.

The Dow Jones industrial average (INDU) lost 86 points, or 1.2%. The S&P 500 (SPX) index fell 10 points, or 1.3%. The Nasdaq composite (COMP) lost almost 8 points or 0.5%.

After rallying 17% in seven sessions, the S&P 500 and the broader market were vulnerable to a bit of a pullback Thursday. Weak economic reports and a selloff in bank stocks led the declines.

"I think it's a classic bear market rally and we're near the top of it," said Tom Hepner, vice president and investment advisor at Ruggie Wealth Management. "That having been said, we are in a bottoming-out process."

Stocks are likely to remain rangebound for the rest of the first half, he said, particularly as investors sort through the first-quarter earnings reports, which begin landing in April. In the second half, stocks could then start a slow climb higher through year-end, he said, "assuming that investors get confidence-building information about the economy."

Autos and auto parts makers gained after Treasury said it is providing a $5 billion bailout of auto suppliers, which have been hit hard by the slump in the automaker industry. GM (GM, Fortune 500) jumped 8.7% on the news. Parts makers American Axle (AXL), Lear (LEA, Fortune 500) and ArvinMeritor (ARM, Fortune 500) gained as well.

The markets gained Wednesday after the Fed said it was buying $300 billion in long-term bonds over the next six months as part of a larger initiative to put $1 trillion into the economy and get credit flowing again.

Friday brings little in the way of economic news or earnings reports. On tap: Fed Chairman Ben Bernanke speaks in Phoenix on the financial crisis and community banking.

Financials: The banking sector remained in focus as the House of Representatives voted to impose a steep tax on large employee bonuses at firms that accepted government bailout money.

The bill was hatched in the wake of the public outcry after AIG (AIG, Fortune 500) paid out $165 million in bonuses to top executives after accepting more than $170 billion in taxpayer-funded help. AIG shares jumped 17%.

In an interview with CNN, Treasury Secretary Timothy Geithner said his department was responsible for a provision in the $787 billion stimulus package that allowed AIG to award bonuses.

Citigroup (C, Fortune 500) said Thursday it was pursuing a reverse stock split to help counter the conversion of the government's big preferred share stake into common stock. After initially rallying over 20%, shares turned lower.

Other bank shares retreated too, including Bank of America (BAC, Fortune 500), Morgan Stanley (MS, Fortune 500), and Wells Fargo (WFC, Fortune 500).

The banking sector, as measured by the KBW Bank index (BKX), rallied 52% through Wednesday's close after ending at multi-year lows two weeks ago.

On Thursday, the KBW lost 9%.

Company news: Oracle (ORCL, Fortune 500) reported higher fiscal third-quarter earnings and a smaller-than-expected drop in sales late Wednesday. The business software maker also declared its first quarterly dividend. Shares jumped 9.7%.

FedEx (FDX, Fortune 500) reported weaker-than-expected third quarter results and also said it will cut back spending by about $1 billion each year.

Market breadth was negative. On the New York Stock Exchange, losers barely edged winners on volume of 1.95 billion shares. On the Nasdaq, decliners beat advancers seven to six on volume of 2.36 billion shares.

Economy: The number of Americans filing new claims for unemployment fell last week to 646,000 from a revised 658,000 the prior week. Economists surveyed by Briefing.com thought claims would fall to 655,000.

However, the number of Americans continuing to receive unemployment benefits rose to a record 5.473 million.

The Philadelphia Fed index, a regional reading on manufacturing, improved to negative 35 in March from negative 41.3 in February, but the number indicated the economy remains deep in recession. Economists surveyed by Briefing.com though it would improve to negative 39.

The index of leading economic indicators fell 0.4% in February, short of expectations for a drop of 0.6%. LEI rose a revised 0.1% in the previous month.

Bear market rally: Stocks rose for six out of seven sessions, with the S&P 500 rising 17% through Wednesday's close. After that run, stocks pulled back a bit Thursday.

In part, the advance has been a bounce off the recent lows, after the S&P 500 slumped 28% in two months, falling to a 12-1/2 year low. But in addition, investors have been glomming on to a few signs of stabilization, such as Tuesday's housing report and last week's February retail sales report.

The financial sector has strengthened after Citigroup and a few other banks said that they were profitable in the first two months of the year. Also, regulators talked about reinstating the "uptick rule" that limits short selling and changing mark-to-market accounting.

Bonds: Treasury prices slipped, raising the yield on the benchmark 10-year note to 2.60% from 2.54% Wednesday. Treasury prices and yields move in opposite directions.

Lending rates were improved. The 3-month Libor rate fell to 1.23% from 1.29% Wednesday, while the overnight Libor rate dipped to 0.3% from 0.31%, according to Bloomberg.com. Libor is a bank-to-bank lending rate.

Other markets: In global trading, Asian markets ended mixed and European markets ended higher.

In currency trading, the dollar fell versus the euro and the yen.

U.S. light crude oil for April delivery settled up $3.47 to $51.61 a barrel.

COMEX gold for April delivery rose $69.70 to settle at $958.80 an ounce. 

NEW YORK (CNNMoney.com) -- Stocks were set to open higher, but just barely, as investors look ahead to the government's weekly report on unemployment.

At 7:45 a.m. ET, the Dow Jones industrial average, S&P 500 and Nasdaq futures were slightly higher. Futures measure current index values against the perceived future performance. They are used to forecast market activity after the opening bell, though they're not always accurate.

On Wednesday, stocks rallied after the Federal Reserve announced several moves aimed at increasing the flow of credit in the nation's economy.

"It's not surprising that we've eased back from that incredible rally," said David Jones, chief market strategist at IG Markets in London.

Jones said he believes that the market is in danger of slumping for the remainder of the week, especially once the "reality" of the job market sinks in later in the morning, with the upcoming data from the government.

Economy: At 8:30 a.m. ET, the government will release its weekly report on initial jobless claims for the week ended March 14. A consensus of economists surveyed by Briefing.com expects a rise to 655,000 from 654,000 the prior week.

After the open, investors will focus on the leading indicators for February, which are expected to have fallen 0.6%, according to a consensus of analyst opinion from Briefing.com. In the prior month, the leading indicators rose 0.4%

The Philadelphia Fed index, one of the more closely watched reports on regional manufacturing, is expected to improve to minus 39 for the month of March, according to the economist consensus from Briefing. In the prior month, the index was minus 41.3.

Companies: Oracle (ORCL, Fortune 500) managed to beat estimates for quarterly sales and profit, and declared its first dividend since going public in 1986, despite overall weakness in the software sector.

The maker of business software announced a 2% increase in total revenues to $5.4 billion in the third quarter, compared to the year-earlier quarter, and a 25% gain in net profit to $1.3 billion, or 26 cents per share excluding certain items. The company's stock jumped 9% in pre-market trading.

Citigroup (C, Fortune 500) announced plans to do a reverse stock split. The value of the finance company's stock has plunged more than 80% over the last year, despite a rally over the last few days.

Global markets: Asian stocks ended lower, with Tokyo's Nikkei index down 0.3%. European stocks were higher in morning trading.

Oil: Prices surged $2.06 to $50.20 a barrel, recapturing its higher price from earlier in the week. A day after its biggest one-day drop in more than two decades, the dollar fell further against the euro, the yen and the British pound. 

NEW YORK (CNNMoney.com) -- Stocks rallied Wednesday, posting gains for their sixth of seven sessions, after the Federal Reserve said it would buy up to $300 billion in long-term government bonds.

The Dow Jones industrial average (INDU) gained 91 points, or 1.2%, to close at 7486, while the S&P 500 (SPX) index advanced more than 2%. The Nasdaq composite (COMP) ended just under 2% higher.

After closing at its lowest level in 12 years on March 9, the Dow has climbed more than 14%, and the S&P 500 has gained 17% over the same period.

Stocks were lower throughout the morning but turned sharply higher after the Fed announced its plan to increase liquidity in the credit markets over the next six months

By purchasing the $300 billion in longer-term Treasurys, the central bank hopes to bring down interest rates on other types of debt tied to the bond market, such as corporate debt and mortgage loans, to ease the flow of credit. The Fed also announced plans to buy an additional $750 billion in mortgage-backed securities.

While the economy is likely to remain weak in the near term, the Fed said it expects the government's efforts to stabilize the financial system to "contribute to a gradual resumption of sustainable economic growth." As was widely expected, the central bank held interest rates steady near 0%.

"The Fed's actions to buy Treasurys is being hailed very positively," said Richard Sparks, senior equities analyst at Schaeffer's Investment Research. "We've had some upward momentum already over the last couple days," he added. "And the Fed's action adds fuel to that fire."

The rally continued from Tuesday's gains after the government issued a much stronger-than-expected report on February housing starts and building permits.

Tuesday's housing data, along with an upbeat report on retail sales last week, raised hopes that these critical areas of the economy are showing tentative sings of improvement.

At the same time, shares of Citigroup and other major financial institutions have been heading higher after top executives said last week that the banks were profitable in the first two months of the year. Citigroup (C, Fortune 500) rose 22% Wednesday while Bank of America (BAC, Fortune 500) gained 17%.

Bank shares also rose on continued speculation that government regulators will modify mark-to-market accounting rules, which could make it easier for financial institutions to sell illiquid assets weighing down their balance sheets.

While these factors helped lift stock prices in recent sessions, many analysts say the market still faces significant economic challenges.

"It's clearly a bear market rally," said Abigail Doolittle, a portfolio manager at Johnson Illington Advisors. "When the true economic reality sets in, we could be in for a pretty precipitous fall."

AIG: A House Financial Services subcommittee met Wednesday to discuss the government's $170 billion bailout of insurance giant American International Group (AIG, Fortune 500), especially $165 million in bonuses the company was giving out after receiving taxpayer-funded assistance.

Edward Liddy, AIG chief executive, told lawmakers that he found the bonuses "distasteful," but necessary because of legal obligations and competition. Still, he said he would ask employees who got $100,000 or more to give half back. (full story)

AIG has been the target of a public and political backlash over the bonuses. President Obama criticized the company Tuesday, and lawmakers are pursuing ways to block or tax the bonuses.

Liddy said Fed chairman Ben Bernanke had known about the bonuses for three months and that Treasury Secretary Tim Geithner found out about them two weeks ago - a week before Geithner has said he first heard of the bonuses from his staff.

The Treasury Department maintains that Geithner did not know about the bonuses until last week.

IBM: Dow component International Business Machines (IBM, Fortune 500) is in talks to buy Sun Microsystems Inc. (JAVA, Fortune 500) for at least $6.5 billion, according to The Wall Street Journal. The deal could create a new powerhouse in the computer server business to challenge the dominant player, Hewlett-Packard (HPQ, Fortune 500).

Sun, which makes the technology platform Java, surged 80% to $9.03 a share. Shares of IBM ended down 1%.

Economy: Before the market opened, the government announced an increase in consumer prices for February that was slightly higher than expected.

The Bureau of Labor Statistics said the Consumer Price Index rose a seasonally adjusted 0.4% in February. The core CPI, excluding volatile food and energy prices, rose 0.2%.

A consensus of economists surveyed by Briefing.com had forecast an overall increase of 0.3%, with core CPI up 0.1%. In January, CPI was up 0.3% and the core prices were 0.1% higher.

Separately, the Mortgage Bankers Association said mortgage applications surged last week, led by a 30% increase in refinancing activity. The spike comes as rates on home loans fall near historic lows, the MBA said.

Bonds: Treasurys surged, after the Fed's announcement, lowering the yield on the benchmark 10-year note to 2.51% from 3.01% Monday. Treasury prices and yields move in opposite directions.

Lending rates improved. The 3-month Libor rate fell to 1.29% from 1.3% Monday, while the overnight Libor rate was unchanged at 0.31%, according to Bloomberg.com. Libor is a bank-to-bank lending rate.

Other markets: In global trading, Asian markets advanced and European markets were mixed.

In currency trading, the dollar fell sharply against the euro and the pound.

U.S. light crude oil for April delivery fell $1.02 to settle at $48.14 a barrel. Earlier, the government reported that the nation's supplies of gasoline soared last week.

COMEX gold for April delivery fell $27.70 to settle at $889.10 an ounce.