Updated from 4:12 p.m. EST

Wall Street rallied for a second session Thursday, this time being helped upward by a deal on a U.S. economic stimulus package and a rebound in foreign markets.

The Dow Jones Industrial Average climbed 108.44 points, or 0.88%, to 12,378.61, the index's first two-day winning streak in two weeks. The S&P 500 was up 13.47 points, or 1.01%, at 1352.07. The Nasdaq Composite was better by 44.51 points, or 1.92%, at 236092.

"We got some follow through from yesterday and we found some support," said Paul Mendelsohn, chief investment strategist with Windham Financial. "There was a lot of news floating around today. We're still incredibly oversold, so hopefully we've put in a bottom here."

Breadth was positive for a second day. On the New York Stock Exchange 5.43 billion shares changed hands, as advancers topped decliners by a 7-to-4 margin. Volume on the Nasdaq reached 2.93 billion shares, with winners beating losers 3 to 2.

Wall Street welcomed news that the White House and House of Representatives leaders agreed on an economic stimulus plan that will give tax rebates of $600 to many individuals and up to $1,200 to couples. The move is the centerpiece of a proposal the White House and Congress have formulated to try to stave off a recession.

Traders also were dealing with a fresh round of earnings that began after the previous close. eBay ( EBAY) said it beat the Thomson First Call average estimates for both earnings and revenue growth. However, the Internet auctioneer offered full-year guidance that was below expectations.

Additionally, eBay said CEO Meg Whitman will step down at the end of March. Auction head John Donahoe will take the reins. Shares of eBay lost 6.1% at $27.18.

Other Internet stocks were trading higher. Shares of Google ( GOOG) ended up 4.7%, and Yahoo! ( YHOO) rose 8.4%. Amazon.com ( AMZN) gained 5%.

eBay's losses were offset by two other tech giants that also reported after the close. Qualcomm ( QCOM) posted an 18% rise in fiscal first-quarter earnings, and Symantec ( SYMC) reported a 13% increase in fiscal third-quarter results. Both ended the day with gains of 10%.

Nokia ( NOK) was another winner, jumping 12.5% after the handset maker said quarterly earnings surged 44% from a year ago. Shares added $4.05 to $36.48.

Elsewhere, Dow component AT&T ( T) matched expectations with a fourth-quarter profit of 71 cents a share. Still, shares ended lower by 94 cents, or 2.6%, to $35.75.

Homebuilder Lennar ( LEN) reported a $1.25 billion loss for the fourth quarter, the largest in its history. Automaker Ford ( F) had a fourth-quarter loss that narrowed from a year ago, but was still bigger than analysts anticipated. Lennar climbed 8.5%, while Ford was off 0.6%.

The earnings parade continued after the closing bell with reports from Microsoft ( MSFT), Broadcom ( BRCM), E*Trade Financial ( ETFC) and Sun Microsystems ( JAVA).

Overseas, European bourses rebounded from losses earlier in the week. The Paris CAC 40 was higher by 6%, Germany's Xetra Dax jumped 5.9%, and London's FTSE 100 was up 4.8%.

The rise in foreign markets comes despite word that French bank Societe Generale said it has uncovered a more than $7 billion fraud committed by a rogue futures trader. The bank said it would need to raise additional capital to offset the losses.

On Wednesday, blue chips erased heavy early losses and closed sharply higher following a rally in financials, snapping a five-session losing streak. Tech stocks, meanwhile, overcame disappointing guidance from Apple ( AAPL) to end with gains.

The Dow rallied over 600 points from its session low to finish up 298.98 points, or 2.5%, to 12,270.17. The S&P 500 added 28.10 points, or 2.14%, to 1338.60, and the tech-heavy Nasdaq gained 24.14 points, or 1.05%, to 2316.41.

"The averages bounced off a technical extreme and a close test of the prior day's intraday low," said Marc Pado, U.S. market strategist with Cantor Fitzgerald. "A report that the New York insurance regulators were discussing a bailout plan for mortgage insurers was likely the main trigger."

Bond insurers were giving back some of the previous session's gains. Ambac Financial ( ABK), which soared 71.9% Wednesday, was down 17.3% at $11.33. MBIA ( MBI) which surged 32.6% last time out, fell 13.3% to $14.40.

Traders also were focusing on the sole economic releases of the week. The Labor Department said initial jobless claims fell by 1,000 to 301,000 last week. The less volatile four-week moving average dropped by 14,000 claims to 314,750.

Shortly after the opening bell, the National Association of Realtors said existing-home sales fell a greater-than-expected 2.2% in December to a rate of 4.89 million annualized units. Economists expected sales to dip to 4.95 million annualized units from 5 million in November.

For all of 2007, existing-home prices fell for the first time since the NAR started tracking existing-home sales in 1968.

Ian Shepherdson, chief economist with High Frequency Economics, said that the pending home-sales headline number proved too optimistic for December.

"The inventory overhang is gigantic and so far shows no sign of reducing," he said. "This means prices will keep falling and low nominal rates will not yet tempt people back into the market."

U.S. Treasury prices were slipping. The 10-year note was down 19/32 in price to yield 3.68%, and the 30-year bond was lower by 31/32 in price, yielding 4.37%.

Commodity prices were climbing. Oil added $2.42 to $89.41 a barrel. Gold futures surged $22.70 to close at $905.80 an ounce.

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