Stocks Rally Strong on Fannie, Freddie Takeover

European and Japanese stocks saw their biggest surge since January and US futures climbed amid news of the Treasury Department’s plan to take charge of Fannie Mae and Freddie Mac, Bloomberg reports. Europe's UBS AG, pounded by subprime losses, and Japan’s Mizuho Financial Group, its biggest bank by assets, jumped 10% after Treasury Secretary Henry Paulson announced the establishment of a conservatorship for the mortgage lenders.

Paulson’s plan “is the beginning of the end of the problem,” said a London global equities officer. “We'll see a floor put under financial shares.” (More Fannie Mae stories.)