Stocks rally, euro rises on bailout plan; UBS, Deutsche Bank, ING advance

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Stocks rallied worldwide, with the MSCI World Index rebounding from its worst week on record, and the euro rose the most in three weeks against the dollar after governments in Europe, the US and Asia agreed to support banks.

UBS AG, Deutsche Bank AG and ING Groep NV jumped more than 10 percent after European leaders agreed to guarantee new bank debt. Morgan Stanley surged 34% in Germany. Oil climbed from a 13-month low on speculation the bailout may avert a collapse of the financial system that threatens economic growth. “They brought out the heavy artillery,'' said Aurore Wannesson-Raynaud, a strategist at Axa Investment Managers in Paris, which oversees about $830 billion. “It's possible that the worst is behind us. We should see better days ahead.'' The MSCI World Index added 2.5 percent to 933.07 at 11:25 a.m. in London. The index tumbled 20% last week and is still down 41% this year. Futures on the Standard & Poor's 500 Index rose 5.4 %.

Europe's Dow Jones Stoxx 600 Index advanced 6.2%, while the MSCI Asia Pacific excluding Japan Index gained 7.4 %. Stocks rallied after the US Federal Reserve said central banks will offer financial institutions unlimited dollar funds and Europe pledged to guarantee bank debt issues and permit governments to buy stakes and recapitalize some distressed financial companies. National benchmark indexes climbed more than 4% in all of the 17 western European markets that were open.

The UK's FTSE 100 jumped 5.1% as BHP Billiton Ltd. and Royal Dutch Shell Plc rose. Germany's DAX advanced 6.9 percent. France's CAC 40 increased 6.5% as Total SA gained.