Dow Jones gains after Citigroup's rescue

New Delhi: Citigroup's rescue spurred a rally on Wall Street, capping the best two-day run since the aftermath of the 1987 stock market crash.

The nearly 400-point rally on Monday sent the market upbeat across all major indicies.

Washington, under pressure to rescue its own ailing motor industry, effectively guaranteed most of Citigroup Inc's, potential $306 billion losses on high-risk assets. It was the biggest bank bailout yet and a measure of the crisis sweeping the world.

The Citigroup intervention had been widely expected in some form, but Asian markets trimmed losses, while European stocks rose 4 per cent on news the US Treasury would not allow the number two US bank to fail in the way of rival Lehman Brothers.

Citigroup shares jumped more than 30 per cent to $5.07 before opening in New York US stock index futures pointed to a generally higher opening on Wall Street. S&P 500 futures were up one per cent.

The Dow Jones industrial average gained 397 points settling at 8,443. The lone decliner on the Dow component was Wall-Mart Stores, which lost a scant 0.3 per cent.

Meanwhile Nasdaq gained 6.3 per cent. Advancers on Nasdaq topped decliners by three to one on volume of 2.64 billion shares.