US mkts rally after President outlines housing plan

The bulls ran again on Thursday with the Dow gaining 174 points and Nasdaq up 43 points. The reason behind the rally is that the Bush administration unveiled its plan to bail out homeowners by instituting a 5-year freeze on interest rates for subprime loans.

The plan involves no government money and is expected to help as many as 1.2 million homeowners to avoid foreclosures. That boosted lenders like Countrywide Financials, which gained more than 15% on the news, Fannie Mae up more than 7%. Financial stocks also benefited with Merrill Lynch up more than 6%, Lehman 5%, JP Morgan up almost 3%.

Wall Street was also focused on how consumers are spending this holiday season. The nation's biggest retailers reported a better than expected November but many cited slowing December sales and on Friday key piece of economic does going to dominate the session when the employment report is released at 8:30 am eastern time.