CLOSING MARKET REPORT
Wall Street rallies on crisis solution hopes

* Treasury mulling RTC-type solution to crisis: source
* Three major indexes jump the most since October 2002
* Dow up 3.9%, S&P up 4.3%, Nasdaq up 4.8%

NEW YORK - Wall Street had its best day in six years on Thursday as news the government is considering a more comprehensive solution to the financial crisis than the current piecemeal approach spurred a furious late rally.

Responding to the week's gut-wrenching upheaval of the financial system, US Treasury Secretary Henry Paulson has been shopping around a proposal to congressional lawmakers that would create an entity to deal with the billions of dollars of bad debt still clogging the financial system, a congressional aide said.

The idea has been compared to the Resolution Trust Corp formed in 1989 to fix the savings and loan industry collapse.

An index of beaten-down S&P financial stocks soared 11.7 per cent while economic bellwethers such as General Electric and Caterpillar also posted sharp gains.

The rally came on the back of steep declines after a frantic four days in which American International Group was bailed out, Lehman Brothers went bankrupt and Merrill Lynch was forced into a shotgun marriage with Bank of America.

The Dow Jones industrial average jumped 410.03 points, or 3.86 per cent, to 11,019.69, while the Standard & Poor's 500 Index climbed 50.12 points, or 4.33 per cent, to 1,206.51.

The Nasdaq Composite Index shot up 100.25 points, or 4.78 per cent, to 2,199.10.

For all three indexes, it was the biggest one-day percentage gain since October 2002 - when the last bull market was born.

Also helping the market were a flurry of headlines that seemed to point to a concerted global effort to clamp down on short sellers, who place bets that stocks will fall.

The latest developments came on the first day that the US Securities and Exchange Commission's new rules aimed against abusive short selling of stock in all publicly traded companies took effect.

Britain's Financial Services Authority said investors will be temporarily barred from taking new short positions in financial stocks from midnight on Thursday, Sept 18, which analysts said raised the possibility of a similar action in the United States.

Source: Singapore Business Times - 19 Sep 2008