"We will also vigorously support scientists who pursue this research. And we will aim for America to lead the world in the discoveries it one day may yield.''
Shares of companies specializing in stem cell research burst upward on the news, with Geron up by as much as much as 35 percent and StemCells up 73 percent at one point.
Other related company shares rose, too.
The decision was a clear repudiation of the approach taken by Obama's predecessor, George W. Bush. U.S. law limits the use of federal money to make human stem cells, but Bush tightened the restrictions even further to include work using such cells.
Bush's decision prompted charges that he was basing his decision on politics and religion rather than science.
Religious conservatives who supported Bush generally opposed embryonic stem cell research because it involves destruction of embryos, which they view as human life.
Obama rejected that view.
"When it comes to stem cell research, rather than furthering discovery, our government has forced what I believe is a false choice between sound science and moral values,'' he said.
"As a person of faith, I believe we are called to care for each other and work to ease human suffering. I believe we have been given the capacity and will to pursue this research—and the humanity and conscience to do so responsibly.''
Keep track of what Obama has been doing since taking office:
Day 48: More Appointed to Treasury Department (Mar. 8)
- Obama has chosen three people to join the senior ranks of the Treasury Department, where a slow pace of hiring has put the agency on the defensive. The White House said Obama is nominating David S. Cohen to be assistant secretary in dealing with terrorist financing; Alan B. Krueger for assistant secretary for economic policy; and Kim N. Wallace as assistant secretary for legislative affairs. (Full Story)
Day 47: Discovering Opportunity in the Crisis (Mar. 7)
- As the dreadful economic news piles up, Obama challenged the nation Saturday to not just hang in there but rather to see the hard times as a chance to "discover great opportunity in the midst of great crisis." (Full Story)
- Obama used his weekly address to detail his plans to fix our ailing economy, noting that reforming healthcare is necessary to ensure our long term fiscal health. (Watch the video here)
Day 46: Obama Touts Economic Gains (Mar. 6)
- Obama tried to highlight some good news and tout his economic plan, but the grim reality of plunging employment and faltering stock markets once again stepped on his message. Obama headed to hard-hit Ohio to attend a graduation ceremony for 25 Columbus, Ohio, police recruits whose jobs were saved by money from the $787 billion stimulus package he signed into law last month. (Full Story)
- Democrats who control the U.S. Senate were unable to round up the votes to end debate and pass a $410 billion bill to fund many government operations through Sept. 30, Senate Majority Leader Harry Reid said.(Full Story)
- Obama will hold an event on Monday at which he will sign an executive order related to stem cells, an administration official said on Friday. (Full Story)