NEW YORK, Sept. 8 (Xinhua) -- Wall Street rallied Monday as the U.S. government's unusual move to bail out mortgage giants Fannie Mae and Freddie Mac.

The Treasury Department announced Sunday that it was seizing control of the companies, which own or back about half the nation's mortgage debt.

However, the bailout plan would wipe out the two companies' common and preferred shareholders. Shares of Fannie and Freddie plunged more than 80 percent Monday, trading at about 1 dollar per share.

The financial sector rebounded strongly Monday on the news. Shares of Bank of America and Citigroup rose more than 4 percent.

Investors hope the bailout of Fannie and Freddie will shore up confidence in the mortgage market and stem a wave of bank write-downs.

The Dow Jones industrial average rose 289.53, or 2.58 percent, to 11,510.49 after rising nearly 350 points in the early session. The Standard & Poor's 500 index advanced 25.49, or 2.05 percent, to 1,267.80, and the Nasdaq composite index added 13.88, or 0.62 percent, to 2,269.76.
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