U.S. stocks gained, led by financial companies, as investors snapped up bank shares trading near the lowest valuation on record and expectations grew that Congress will reach an agreement on a plan to revive the economy. Bank of America Corp. added 8.1 percent and Citigroup Inc. climbed 4.6 percent following plunges of at least 15 percent yesterday on skepticism the government’s financial-rescue proposal will work. The rally in financial shares came after yesterday’s sell-off dragged the KBW Bank Index to near its lowest price-to-book ratio in at least 16 years. Eight of 10 industries in the Standard & Poor’s 500 Index advanced. “People are figuring out that yesterday was overdone and that they’re going to deploy more money than expected,” said Scott Nations, president of Fortress Trading Inc. in Chicago. “People had a bit of a tantrum yesterday when they didn’t get what they wanted and now they realize the tantrum was overdone.” The S&P 500 added 1 percent to 835.59 at 11:37 a.m. in New York. The index plunged 4.9 percent yesterday, the most since Barack Obama’s inauguration, after Treasury Secretary Timothy Geithner detailed his plan to save the financial industry. The Dow Jones Industrial Average rose 78.61 points, 1 percent, to 7,967.49, while the Russell 2000 Index increased 1 percent. Gains Extended Benchmark indexes extended gains after an aide said Democratic House and Senate leaders are near agreement on a $789.5 billion economic stimulus plan. Geithner pledged up to $2 trillion in government financing for programs aimed at spurring new lending and addressing banks’ toxic assets. The proposals, which he said will “take time” to bear fruit, include limits on bank dividends and acquisitions. He said he’s yet to decide on the best way to revive the financial system. Citigroup advanced 15 cents to $3.50, and Bank of America added 45 cents to $6.01. The KBW Bank Index added 5.4 percent, rebounding from yesterday’s 14 percent tumble. The index’s price-to-book ratio was 0.48 yesterday, near the 0.45 reached on Jan. 20, which was the lowest in Bloomberg data going back to 1993. All but one of 24 lenders in the gauge have retreated this year as the index has tumbled 37 percent. “After 18 months of chaos in the debt markets, equity investors are very supportive of the goals of the plan,” Brad Hintz, an analyst at Sanford C. Bernstein Co. in New York, wrote in a report today. “Unfortunately, the plan that the Treasury announced was long on rhetoric and short on specifics.” XL Rallies XL Capital Ltd. surged 42 percent to $4.13 for the biggest advance in the S&P 500 after the Bermuda-based business insurer said it’s cutting 10 percent of staff and slashing the dividend by almost half after posting a second straight loss on investment declines. Research In Motion Ltd. slipped $9.58 to $47.46. The maker of the BlackBerry phone said fourth-quarter results will be lower than estimated, signaling the company sacrificed profit margins to gain customers. Technology companies in the S&P 500 have advanced 2.7 percent this year, the only gain among 10 industries. “Tech has been able to perform well and now we’ve got RIM coming out with this and it shows that no sector is safe,” said Suzanne Bodlovic, an independent equity futures trader at the Chicago Board of Trade. Nvidia Corp. fell 14 percent to $8.03 after reporting a fourth-quarter loss that exceeded analysts’ estimates. The second-largest maker of graphics chips led a gauge of semiconductor stocks lower for a second day. The group slipped 2.7 percent for the biggest loss among 24 industry groups. All but three of 18 stocks in the index fell. Rogers’ Shorts Jim Rogers, chairman of Rogers Holdings, said he boosted his wagers that U.S. stocks will drop because the government’s economic revival plan is a “disaster.” Rogers is shorting U.S. equities including International Business Machines Corp., General Electric Co. and JPMorgan Chase & Co. after closing earlier bets during October’s meltdown, he said in a Bloomberg Television interview from Singapore. In a short sale, investors borrow securities and agree to sell them at a later date, profiting from any drop in the stock. IBM is down 10 percent from a year ago while GE has tumbled 65 percent and JPMorgan has skidded 39 percent.

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