Wall Street enjoyed its best day of the year Tuesday with an impressive rally led by the financials.

The Dow Jones Industrial Average soared 379.44, or 5.8%, to 6,926.49, while the S&P 500 rose 43.07, or 6.37%, to 719.60. The Nasdaq jumped 89.64, or 7.07%, to 1,358.28.

Dylan Ratigan, the moderator of CNBC's "Fast Money" TV show, said the "relief" rally was fueled by news of some potential legislative relief with the restoration of the uptick rule and congressional action later in the week on the controversial mark-to-market accounting rules.

He also said the financials got a big lift from Citigroup ( C) whose CEO Vkram Pandit said in an memo that the bank had been profitable in the first quarter.

Karen Finerman was skeptical of the rally. "It's nice to have a bounce," she said, adding the Dow merely returned to the level it was at last Wednesday at lunch.

Tim Seymour said a lot of the rally was short-covered. He said the difference today was that traders were covering 50% to 60% of their shorts instead of the normal 5% to 10%.

Guy Adami said he would feel better about the rally when the S&P returns to 741.

Finerman said this might be "the greatest banking environment we've seen in the past 25 years." "Rates haven't been this wide, and the cost of funds hasn't been this low," she said.

Adami reminded viewers of the 35% move in PNC Financial Services ( PNC) since Friday, while Seymour said a "cleaner" way to invest in the financials is to go with Goldman Sachs ( GS) and Morgan Stanley ( MS) which aren't burdened with the huge balance sheet problems of the large banks.

Zachary Karabell said the rally in the financial stocks demonstrates there's money to be made in banks that are serving the 135 million people who are working.

Ratigan shifted the discussion to the uptick rule, which received a divided response from the panel. Adami was upset about the move to install it, saying it discriminates against traders with a bearish view. "Why can't they sell on a minus tick?"

Ratigan said the move was made to reduce market volatility, while Karabell said it would act as a circuit breaker against extreme short selling.

Seymour said the market players hate the rule because it means a change in the status quo.

Ratigan noted the Nasdaq was up 7% today, but Finerman wasn't impressed, saying the sector has been "so, so beaten up." "It's not a move up as it's less down," she said.

Seymour said China's economy is on the mend, with auto sales up 25% last month and electricity demand up 4%, all of which bodes well for those trading in copper and steel.

Ratigan brought in Jeff DeGraaf, head of technical analysis for ISI, to talk about technical conditions behind today's rally. DeGraff said the market is very oversold, with the S&P 500 so far away from its 200-day moving average that it would take a 35% rally to bring it back to even.

He said another technical sign of the oversold market conditions is the bearish sentiment, which is currently at a survey-high 70%.

He said today's rally was the best market day in six months in terms of breath and volume. "At the minimum, this is a bear market bounce," he said.

In this market, he liked Sprint Nextel ( S) and Morgan Stanley.

Joe Terranova told viewers that today's rally is a "moment of opportunity" for those who have been so psychologically beaten down by the extreme pessimism in the market. He said he is investing in energy names and technology stocks.

With commodities so cheap relative to where they were 20 years ago, Seymour said the way to play copper is to go with a Peruvian copper producer like Teck Cominco ( TCK), which is down 80%.

Despite today's huge rally, Finerman said bonds remain an attractive investment. In particular, she liked TXU Energy 10.25% 2015 bonds.

Bruce Hartig, a consumer financial analyst for Barclays, appeared on the show to talk about the impact of Term Asset-Backed Loan Facility, which was designed to provide liquidity to the asset-backed securities markets.

Hartig said he's hearing that the funds will be immediately used by auto finance companies. He said credit card companies will probably take a wait-and-see approach, while student lenders will use them quickly.

He said the Fed is putting money into the securitization market only at the triple-A levels. He said he would take a look at stocks like American Express ( AXP) and Capital One ( COF), but only after the unemployment numbers stabilize.

In the final trades, Seymour was for Russia ETF ( RSX) if oil breaks out. Adami was for HP ( HPQ). Finerman was for Transocean ( RIG), and Karabell liked iShares FTSE/Xinhua China 25 ( FXI).

"Check out "'Fast Money' Portfolios of the Week" on Stockpickr every Thursday.

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