Stocks surge on bank plan, rise in home sales

Finally, some good news on the economy front today  - Stocks surge on bank plan, rise in home sales!

Here is the article from the Associated Press.

Highlights from the article:

1) Investors reignited a two-week rally Monday, cheering the government's plan to help banks remove bad assets from their books as well as a report showing a surprising increase in home sales. Major stock indicators jumped as much as 6 percent, including the Dow Jones industrial average, which soared more than 400 points.  

2) The Treasury Department's bad asset cleanup program would tap money from the government's $700 billion financial rescue fund and involve help from the Federal Reserve, the Federal Deposit Insurance Corp. and the participation of private investors.

3) Meanwhile, the housing report released Monday was overwhelmingly positive for the markets even though it showed a decline in home prices in February. Investors are embracing any sign that a glut in homes for sale may be easing.

4) The market had received another dose of housing good news last week on the troubled industry as housing starts for February came in much better than expected.

5) Shares of the country's largest banks, which have been pounded in recent weeks over concerns about their ability to weather the crisis, soared on Monday. Citigroup Inc. jumped 17 percent, and Bank of America Corp. added 18 percent. Even banks seen as being on better footing posted big advances. JPMorgan Chase & Co. rose 18 percent, while Wells Fargo & Co. rose 17 percent.

6) More than 10 stocks rose for every one that fell on the New York Stock Exchange, where volume came to a moderate 1.14 billion shares.

7) Investors welcomed the rise in home sales Monday even though the biggest jump in nearly six years came as first-time buyers pounced on deep discounts of foreclosures and other distressed properties.

The bad news won't last forever. The pendulum will start to change and at that point the sellers will have more leverage.