Stocks bounced back in a big way Tuesday, after the Federal Reserve Board announced a new plan to revive the credit markets.
The Fed said it will lend $200 billion to investment firms, in exchange for debt and mortgage-backed securities. This new program, called the Term Securities Lending Facility, will lend cash for 28-day periods.
The move represents a new tack for the Fed, which has tried for months to loosen lending conditions by easing monetary policy. Since mid-September, a series of rate cuts have pushed the federal funds rate to 3% from 5.25%.
The Fed action lifted stocks, as the Dow gained more than 200 points in morning trading.
Lehman Brothers (nyse: LEH - news - people ) gained more than 6%, while Merrill Lynch (nyse: MER - news - people ) and Goldman Sachs (nyse: GS - news - people ) each jumped more than 4%.
In other news, European Union regulators approved Google (nasdaq: GOOG - news - people )'s $3.1 billion bid for online ad tracker DoubleClick. The regulators dismissed concerns that the deal would give Google an unfair advantage over competitors, ruling that DoubleClick is not currently one of its rivals.
Shares of Google bounced off recent 52-week lows, gaining 4% Tuesday morning.
Other tech stocks were on the rise, like Apple (nasdaq: AAPL - news - people ) and Microsoft (nasdaq: MSFT - news - people ), which both rose about 3%.
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