By Whitney Kisling Dec. 8 (Bloomberg) -- U.S. stocks rallied for a second day after President-elect Barack Obama pledged the largest public works-spending package since the 1950s and lawmakers worked to reach an agreement to rescue the auto industry. U.S. Steel Corp. and Alcoa Inc. climbed at least 13 percent, while Chevron Corp. added more than 4 percent, as Obama’s plan to boost infrastructure spending spurred gains in commodities. General Motors Corp. jumped more than 11 percent as lawmakers agreed in principle with the White House on providing funds to shore up the car industry. Regional benchmark indexes in Europe and Asia added more than 4.3 percent. “Hopefully it helps get the economy turned around, jumpstarting private spending with public spending,” said Bill Stone, who helps oversee about $56 billion as chief investment strategist at PNC Wealth Management in Philadelphia. “That’s the whole point of this is to try to get that jumpstart going.” The Standard & Poor’s 500 Index increased 3 percent to 902.27 at 10:09 a.m. in New York, with all 10 of its industry groups advancing. The Dow Jones Industrial Average added 2.9 percent to 8,882.01. The Nasdaq Composite Index rose 2.6 percent to 1,548.9. Six stocks gained for every one that fell on the New York Stock Exchange. The S&P 500 has climbed more than 19 percent from an 11- year low Nov. 20 on speculation the Federal Reserve will cut interest rates and Congress will step up efforts to boost the economy. The benchmark index is still down 39 percent in 2008 after the collapse of the subprime mortgage market reduced profits. Cash, Market Value Stocks have fallen so far that 2,267 companies around the globe offered profits to investors for free as of the open of trading today. That’s eight times as many as at the end of the last bear market, when the shares rose 115 percent over the next year. Bank of New York Mellon Corp. in New York, Danieli SpA in Buttrio, Italy, and Seoul-based Namyang Dairy Products Co. held more cash than the value of their stock and debt as the slowing world economy wiped out $32 trillion in capitalization this year. Companies in the MSCI World Index traded for an average $1.17 per dollar of net assets, the lowest since at least 1995, and 39 percent sold at a discount to shareholder equity as of the open, data compiled by Bloomberg show. Obama said Dec. 6 he will boost investment in roads, bridges and public buildings to create or preserve 2.5 million jobs after companies cut payrolls at the fastest pace in 34 years. ‘Dramatic Action’ “There’s an awareness now that this is across the board,” Laszlo Birinyi, president of Birinyi Associates Inc. in Westport, Connecticut, told Bloomberg Television. “You have bleeding all over and a Band-aid here and a Band-aid there is not going to form a solution. You’ve got to really take some dramatic action, and I think that’s what investors are responding to today.” U.S. Steel, the nation’s second-biggest steelmaker, jumped 17 percent to $33.51 after Goldman Sachs Group Inc. upgraded the shares to “conviction buy” from “conviction sell,” saying steel prices are on the verge of rebounding. Alcoa Inc., the largest U.S. aluminum maker, jumped 13 percent to $9.20. Freeport-McMoRan Copper & Gold Inc., the largest publicly traded copper producer, added 14 percent to $19.15. Raw materials producers in the S&P 500 climbed 5.7 percent as a group for the biggest advance among 10 industries. Commodity prices rebounded from last week’s losses on speculation Obama’s spending on roads, bridges and school repairs will boost demand. Copper futures rose 9.8 percent, while crude climbed 7.5 percent to $43.86 a barrel. Energy Gains Exxon Mobil Corp., the world’s largest oil company, climbed 2.4 percent to $78.46. Chevron, the second-biggest, increased as much as 4.3 percent to $77.63. GM, the largest U.S. automaker, rallied 11 percent to $4.52. Ford, the second-biggest, surged 5.1 percent to $2.85. U.S. lawmakers are working to hammer out details of legislation to bail out ailing auto companies, after reaching an agreement in principle with the Bush administration. The legislation is taking shape after House Speaker Nancy Pelosi dropped her opposition to drawing on $25 billion in funds from the Energy Department intended to help automakers develop more fuel-efficient vehicles, according to a Democratic aide who declined to be identified. To contact the reporter on this story: Whitney Kisling in New York at wkisling@bloomberg.net.

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