US stocks rose on Wednesday as bank stocks surged on optimism the Obama administration was making progress on a plan to remove money-losing assets from banks' books. Financial stocks were a standout, with J.P. Morgan leading the Dow with an 8 percent gain to $27.13 and the S&P financial index soaring almost 10 percent, on reports that plans were advancing to create a "bad bank" that would mop up assets whose worth has plummeted.
"Until the banking component of the crisis is dealt with, there will continue to be this cloud of anxiety and concern overhanging the markets," said Jim King, president and chief investment officer at National Penn Investors Trust Company in Reading, Pennsylvania. Investors' focus was also on a statement from the Federal Reserve's monetary policy-setting Federal Open Market Committee, expected at 1915 GMT.
The Dow Jones industrial average gained 128.08 points, or 1.57 percent, to 8,302.81. The Standard & Poor's 500 Index added 20.40 points, or 2.41 percent, to 866.11. The Nasdaq Composite Index rose 44.36 points, or 2.95 percent, to 1,549.26.