Stocks snapped a three-day losing streak as lawmakers grew close to an agreement for a Wall Street bailout.
All three major indexes gained at least 1 percent: The Dow Jones Industrial Average rose 196.89, or 1.8 percent, to close at 11022.06, after earlier being up more than 300 points. The S&P 500 advanced 2 percent and the Nasdaq climbed 1.4 percent.
Financials led the way, withJPMorgan and Bank of America among the top three gainers on the Dow. (Track the Dow winners and losers.)
House and Senate negotiators have reached a "fundamental agreement," said Sen. Chris Dodd, chairman of the Senate Banking Committee, echoing earlier comments that it was "almost a done deal" by U.S. Representative Paul Kanjorski. But House Republicans clarified that there are still some unresolved issues. In any case, a deal is expected in the next few days.
The market numbers may have conveyed elation but the mood on the trading floor was anything but. Traders had a serious case of buy the rumor, sell the news.
"I don't want them to ever let out the details!" Steve Grasso of Stuart Frankel told CNBC. "We can keep this rally probably into next week, but then you're going to see the details flood out and we're going to sell off of that."
"I think [traders] are celebrating Congress’s action but I haven’t seen much evidence that what really they’re hoping to [get addressed], which is the credit markets," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. "I don’t see much to cheer about — yet."