dow closes up 485points..go bulls, page-2

NEW YORK, Sept 30 (Reuters) - Wall Street roared back on
Tuesday, a day after its worst sell-off in 21 years as
investors bet Washington would revive a plan to stabilize the
U.S. financial sector following its surprising defeat on
Monday on Capitol Hill.

Adding to the positive tone was a Reuters report that U.S.
regulators intend to provide new accounting guidelines that
could slow the heavy flow of mortgage-related losses on banks'
balance sheets. The Dow jumped 485 points after posting a
one-day record loss of 778 points on Monday.

Strains persisted in credit markets, however, suggesting
banks remain reluctant to lend to each other, and September
marked the benchmark S&P 500's worst month in six years.

But investors were feeling more optimistic after President
George W. Bush and congressional leaders pledged to continue
talks on a $700 billion financial-sector rescue plan.

The S&P 500 rose more than 5 percent, recovering more than
half of the losses booked on Monday when the House of
Representatives rejected the plan, which would have let the
U.S. Treasury buy bad mortgage debt from stressed banks so
they can resume lending.

Tuesday's climb marked the S&P's best one-day percentage
gain since July 2002.

"The president's saying that they'll get something passed
this week has definitely calmed nerves," said Marc Pado,
market strategist at Cantor Fitzgerald & Co in San Francisco.

"And if a bill doesn't pass, a change in accounting rules
might be enough to break the lock in credit markets," he
added. "It won't support us forever, but it will buy time and
break the stranglehold on the banks."

Under current rules, banks must value assets based on what
they would fetch in a current market transaction. Since prices
for mortgage-related assets have long been at distressed
levels, banks have been forced to scurry for more capital.

The Dow Jones industrial average <.DJI> rallied 485.21
points, or 4.68 percent, to 10,850.66. The Standard & Poor's
500 Index <.SPX> jumped 58.35 points, or 5.27 percent, to
1,164.74. The Nasdaq Composite Index <.IXIC> climbed 98.60
points, or 4.97 percent, to 2,082.33.

For the month of September, the Dow fell 6 percent -- its
worst month since June. Tuesday also marked the end of the
third quarter, when the Dow fell 4.4 percent. This was the
Dow's worst quarter since the second quarter of this year.

This is the Dow's longest quarterly losing streak since
1977-1978.

The S&P 500 lost 9.1 percent in September, its worst month
since September 2002. For the third quarter, the S&P 500
finished with a 9 percent loss. This was the S&P 500's worst quarter since the first quarter of 2008.

This is the S&P's longest quarterly loss streak since
2000-2001.

The Nasdaq sank 12.1 percent in September -- its worst
month since September 2001, when the Sept. 11 attacks on the
United States occurred. For the third quarter, the Nasdaq
dropped 9.2 percent. This was the worst quarter for the Nasdaq
since the first quarter of this year.

On Tuesday, investors snapped up beaten-down shares across
the board, with financial and technology companies among the
standouts. Apple Inc contributed the most to the
Nasdaq's advance, a day after the iPod's maker led the index
to its worst day since the bursting of the Internet bubble in
April 2000.

Among financials, JPMorgan shares rose 14 percent to
$46.70, making the stock a top boost to the Dow. Shares of
Citigroup climbed 15.6 percent to $20.51.

It is not unusual for big sell-offs like Monday's to be
followed by a short-term relief rally, Mary Ann Bartels, chief
U.S. market analyst at Merrill Lynch, wrote in a note to
clients. Of the eight times the S&P fell by at least 8.79
percent, a next-day rally occurred six times, she said.

Between July and September, though, the S&P 500 index
posted its worst quarter since the third quarter of 2002 and
its biggest monthly drop since September of the same year.

What happens next in Washington, investors said, would be
instrumental in providing direction for the broader market.

"I am worried that if there is no plan, then the credit
squeeze will get worse and it will be like a boa constrictor
has got the economy and just keeps squeezing," said Al Kugel,
chief investment strategist at Atlantic Trust in Chicago.

The bailout plan's surprising defeat rattled markets
around the globe, with Asian stocks following Wall Street's
Monday slide overnight. European shares recovered after Bush's
remarks and on data showing improvement in U.S. consumer
confidence.

Shares of Apple Inc , a tech bellwether, rose 8
percent to $113.66 on Nasdaq. Shares of Intel Corp
climbed 8.5 percent to $18.73 after Piper Jaffray, a
brokerage, raised its recommendation on the chip maker's
stock.

In economic news, the S&P/Case-Shiller Home Price Index
showed further deterioration in housing, with prices of U.S.
single-family homes plunging a record 16.3 percent in July.
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But both the September Chicago PMI, a measure of
manufacturing activity in the U.S. Midwest, and the Conference
Board's reading on consumer confidence in September, were
stronger than expected, tempering concern about the economy.

About 1.62 billion shares changed hands on the New York
Stock Exchange, below last year's estimated daily average of
roughly 1.90 billion. On Nasdaq, about 2.37 billion shares
traded, well above last year's daily average of 2.17 billion.

Advancing stocks outnumbered declining ones on the NYSE by
about 4 to 1. On the Nasdaq, advancers beat decliners by
nearly 2 to 1.