Updated from 12:49 a.m.

Asian stocks closed higher Monday, stocks in Europe are rising and U.S. stock futures indicate a higher opening for markets in the U.S. after the U.S. Treasury and Federal Housing Finance Agency announced a plan to temporarily take control of faltering mortgage giants

Fannie Mae

(FNM)

and

Freddie Mac

(FRE)

.

Japan's Nikkei 225 Stock Average closed up 3.4% to 12,624.46, while the Hang Seng index in Hong Kong closed at 20,692.75, a rise of 3.8%.

The FTSE 100 in London rose almost 4% to 5,439.80, and the DAX in Germany rose 3.4% to 6,335.89.

U.S. stock futures also rose on the news. Futures on the

Standard & Poor's 500

index rose 36 points to 1277, and were 36 points above fair value.

Nasdaq

futures rose 40 points to 1810 and were 41 points above fair value.

Treasury Secretary Henry Paulson and FHFA Director James Lockhart, in a press conference in Washington on Sunday, outlined the federal government's plan to fund and control the public-private firms under a conservatorship agreement.

Business at Fannie and Freddie will open as usual Monday. The firms are permitted to modestly increase their mortgage-backed securities portfolios through the end of 2009 in an effort to help stabilize the secondary mortgage market and lower the cost of funding.

Under the plan, approved by the boards of both companies, the FHFA will take control of management and the boards. The current CEOs of the two firms will depart after a brief transition.

This article was written by a staff member of TheStreet.com.