Dow Soars More Than 400 Points

Thomas said the newest measure should give the market some time to find its footing. "But eventually investors are going to want to see some hard data, particularly improvements in employment and in the GDP," he said.

Still, given the magnitude of the rally, he expects the upturn to sustain itself for at least the remainder of the week.

The new day brought one optimistic economic indicator from the University of California at Los Angeles, whose quarterly Anderson Forecast projected that the U.S. would not enter a recession this year unless the credit crisis worsens even further.

However, a Bloomberg survey showed that economists believe the slowdown in the U.S. will be worse than previously expected and the recovery not as pronounced as had been thought.

For now though, financial stocks were rising virtually across the board. Citigroup (C Quote) jumped 9.1%, and Bank of America (BAC Quote) rose 6.8%. Wells Fargo (WFC Quote) was up 10.5%.

Washington Mutual (WM Quote) spiked 18.3%, meanwhile, as rumors swirled that it might receive investments from Warren Buffett or Goldman Sachs (GS Quote).

Goldman itself, along with fellow investment banks JPMorgan Chase (JPM Quote) and Morgan Stanley (MS Quote), were advancing between 5% and 11%.

Elsewhere in the financial space, bond insurers MBIA (MBI Quote) and Ambac (ABK Quote) climbed 12.7% and 6%, respectively, while Freddie and Fannie gained 15.9% and 11.1%, respectively.

Jumping on the bandwagon was Thornburg Mortgage (TMA Quote), whose shares more than doubled. The mortgage lender restated year-ago earnings far downward to reflect the shrunken value of mortgage-backed assets, but also said it was working with its lenders to meet margin calls, news of which had pounded its stock last week. Shares vaulted 120% to $1.56.

Separately, Citi is putting $1 billion in six of its municipal bond funds in order to protect them from margin calls, according to a report in The New York Times. The funds, the report said, have $15 billion in assets, and have already received roughly $600 million.

Also leaping was Hovnanian Enterprises (HOV Quote) even though the struggling homebuilder widened its fiscal first-quarter loss from a year earlier and missed estimates. Then, CEO Ara Hovnanian told CNBC that he couldn't call a bottom in the housing contraction just yet. Still, shares were better by 16.4%.

Over in the tech sector, Google (GOOG Quote) has closed its deal to buy Web ad-services firm DoubleClick on the heels of approval from the European Commission, which said the merger wouldn't unfairly hurt competitors. Google shares added 6.3% to $439.84.

As most parts of the market rallied, however, health insurers struggled mightily. WellPoint (WLP Quote) was one of the hardest hit, slumping more than 28% to $47.26 after it downwardly revised its profit forecast.

At the same time, Aetna (AET Quote) sank 8.3% to $42.65 after it repeated its projection that full-year operating earnings would be $4 a share and first-quarter profits would be 92 cents. While Aetna said the same thing before, both are below estimates.

UnitedHealth (UNH Quote), Humana (HUM Quote) Coventry Health (CVH Quote) lost between 13% and 24%.

Shares of Texas Instruments (TXN Quote) fell 3% to $28.76 after the chipmaker whittled down its current-quarter forecast for both income and revenue, saying that an unidentified cell-phone maker has cut down on orders.

Boeing (BA Quote) said it will file a formal protest after losing a $40 billion Air Force contract to Northrop Grumman (NOC Quote) and European Aeronautic Defence & Space. Shares of Boeing shed 1.3%.

Following the last close, Bear Stearns (BSC Quote) CEO Alan Schwartz echoed Ace Greenberg, chairman of the company's executive committee, in brushing off speculation that the firm has liquidity problems. In a statement, he said "Bear Stearns' balance sheet, liquidity and capital remain strong." Bear's shares saw action on both sides of the flat line, and finished up 1.1%.