The Dow Jones Industrial Average is seen on a digital display at the New York Stock Exchange March 23, 2009. [Xinhua]

U.S. stocks staged the strongest rally this year on Monday as the market was boosted by U.S. government's latest plan on clearing bad bank assets and a larger-than-expected rise in existing home sales.

S&P 500 indexes jumped more than 7 percent, while Dow surged nearly 500 points.

The stocks opened sharply higher on Monday after the U.S. Treasury Department revealed its latest plan to remove financial institutions' bad assets. The plan would rely on the government's US$700 billion of financial rescue fund, the Federal Reserve and the Federal Deposit Insurance Corp., as well as private investors.

The financial sector led the way up as big banks rallied with investors betting that the new plan will help improve the banks' balance sheets. Citigroup rose 19.47 percent to US$3.13 a share, and Bank of America shares jumped 26.01 percent to US$7.8. JPMorgan Chase shares added US$5.71, or 24.67 percent, to US$28.86 and Wells Fargo & Company shares gained US$3.34, or 23.87 percent, to US$17.33.

The news of the government's bad asset rescue plan is seen on the screen at Times Square in New York, the United States, March 23, 2009. [Xinhua]

The release of February existing home sales data, which beat estimates, helped to fuel the rally. The National Association of Realtors said on Monday that sales of existing homes grew 5.1 percent to an annual rate of 4.72 million last month, from 4.49 million units in January. It was the largest sales jump since July2003.

Moreover, crude oil price gained US$1.73 to settle at US$53.8 a barrel on the New York Mercantile Exchange after topping US$54.05 a barrel. Energy shares soared with Exxon Mobile Corporation and Chevron Corporation gaining nearly 7 percent.

Dow Jones surged 497.48, or 6.84 percent, to 7,775.86. Broader indexes also moved sharply higher. The Standard & Poor's 500 index advanced 54.38, or 7.08 percent, to 822.92, and the Nasdaq gained 98.50, or 6.76 percent, to 1,555.77.

(Xinhua News Agency March 24, 2009)