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Updated from 9:00 a.m. EDT

U.S. stocks roared higher Friday following reports that the government was creating a sweeping fix for the financial crisis. Further support came in the form of a moratorium on short-selling by the

Securities and Exchange Commission



Dow Jones Industrial Average

jumped 238 points to 11,258, and the

S&P 500

gained 36 points to 1243. The


added 111 points to 2310.

Financial stocks were off to the races. Names including

Washington Mutual

(WM) - Get Free Report



(WB) - Get Free Report



(C) - Get Free Report


Morgan Stanley

(MS) - Get Free Report

were all showing sizable double-digit gains.

During Thursday's volatile session, the major indices swung back and forth before rallying sharply in the afternoon. The

Dow Jones Industrial Average

traded in a 617-point range before gaining 410 points, or 3.9%. The S&P 500 and Nasdaq added 4.3% and 4.8%, respectively.

The late gains came on a


report that the Treasury Department was formulating an entity that would remove bad debt from companies' balance sheets. The plan includes a possible $800 billion fund to buy bad debt from troubled financial firms.

Early Friday, the Treasury said it would offer $50 billion from its Exchange Stabilization Fund to insure


mutual funds. A number of such funds have lately been under fire thanks to investment in bad debt from bankrupt

Lehman Brothers

and flailing insurer


(AIG) - Get Free Report



Federal Reserve

also said it would build on its liquidity programs to assist money-market funds, by taking steps that include buying short-term debt issued by

Fannie Mae



Freddie Mac


and the

Federal Home Loan Banks


Treasury Secretary Henry Paulson is slated to hold a press conference at 10 a.m. EDT to discuss the Treasury's role in the markets.

The SEC, meanwhile,

banned short-selling

of 799 financial stocks, effective immediately. The temporary crackdown will remain in place until Oct. 2 but may be extended further. The U.K.'s financial regulator also banned short sales of 29 of its publicly traded companies. Short-selling, or making a bet that a given stock's price will fall, has been a source of heated controversy as some have speculated that short-sellers are responsible for the decline of

Bear Stearns


Lehman Brothers


Elsewhere in the financials space, AIG said

Edward Liddy

will succeed Robert Willumstad as chairman and CEO. Willumstad was ousted by Treasury Secretary Henry Paulson as part of a government bailout package for AIG.

Stocks were further buoyed by decent earnings statements in the technology sector. After Thursday's session closed,

software maker Oracle

(ORCL) - Get Free Report

reported rising fiscal first-quarter profits but offered cautious revenue guidance.

Mobile device maker



posted a wider first-quarter loss but still bested Wall Street's estimates.

Looking at commodities, oil was gaining $1.52 to $99.40 a barrel. Gold was giving back $35.90 to $861.10 an ounce after surging more than $110 in the previous two days.

Longer-dated U.S. Treasury securities were declining in price. The 10-year was down 2 points to yield 3.78%, and the 30-year was off 2-16/32, yielding 4.33%. The dollar was making substantial gains on its major foreign competitors.

Overseas, the FTSE in London was up 8.5%, and the DAX in Frankfurt was gaining 4.9%.

Asia stocks

went on a tear. The Nikkei in Japan closed with a gain of 3.8%, and the Hang Seng in Hong Kong jumped 9.6%.