Tuesday's early afternoon trade: bank shares lead rally after Lehman offering

US stocks gained more than 2 percent on Tuesday as strong demand for a Lehman Brothers Holdings Inc share offering and a big UBS write-down helped to ease credit market concerns. Financial shares rallied, with the S&P financial index up 5.6 percent.
Swiss investment bank UBS AG's news suggested to some that the bank was wiping its slate clean, and its US-listed shares surged 15 percent to $33.11. Shares of Lehman jumped 16.3 percent to $43.80 after the bank said it raised $4 billion of capital after an offering of convertible preferred shares, bolstering its balance sheet and erasing fears that it was facing the same predicament as Bear Stearns, which nearly collapsed two weeks ago.
The Dow Jones industrial average gained 317.05 points, or 2.59 percent, to 12,579.94. The Standard & Poor's 500 Index rose 36.24 points, or 2.75 percent, to 1,358.94. The Nasdaq Composite Index jumped 64.60 points, or 2.83 percent, to 2,343.70.
J.P. Morgan Chase, up 7.5 percent at $46.12, contributed the most to the advance of both the Dow industrials and the S&P 500 in afternoon trading. Citigroup Inc, up 9.4 percent at $23.44, and Bank of America Corp, up 6 percent at $40.20, rounded out the top three stocks in the S&P. On the Nasdaq, Microsoft Corp, up 3.2 percent at $29.30, was among the top positive influences. Shares of Apple gained 2.6 percent to $147.21.