Updated from 9:42 a.m. EDT

Stocks in New York were climbing sharply Thursday as the prospect of a quick bailout for financial firms trumped a gloomy earnings forecast from General Electric ( GE) and discouraging economic data.

The Dow Jones Industrial Average was up 217 points at 11,042, and the S&P 500 climbed 22 points to 1208. The Nasdaq added 33 points to 2189.

On Wednesday, the three major indices finished narrowly mixed after a day of erratic trading. Investors were focused on Treasury Secretary Henry Paulson's $700 billion bailout plan for the financial sector.

Speaking Wednesday evening in Washington, D.C., President Bush called for a quick approval of the Treasury's plan and warned the economy would face a recession if the package were not approved. Bush called an emergency meeting with presidential candidates John McCain and Barack Obama, as well as certain members of Congress, to work out a plan to pass the bill.

After Bush's speech, Rep. Barney Frank, chairman of the House Financial Services Committee, told CNBC that he believed the bill would pass.

"This crisis could result in a deflationary period, and that obviously would mean a prolonged, serious -- not recession, but depression," said Peter Cardillo, chief market economist at Avalon Partners. However, the plan is not without a price tag, he said. "It means the printing presses at Treasury will be running on full cylinders," said Cardillo, which means inflation remains a concern, "but it's the lesser of the two evils."

Cardillo said that if the Treasury buys back troubled assets, it's a step toward returning confidence to the financial system. The $700 billion price tag, he said, indicates that the Treasury "themselves don't know how much is out there, so they're going to the higher end of what they believe will do the trick." He said that it's possible the plan could end up costing $300 billion or $400 billion, but the ultimate price is uncertain.

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