Wall Street soared to its highest levels in nearly a month Monday as the markets bet a potential rescue of Detroit's Big Three auto makers and President-elect Barack Obama’s enormous stimulus plans will help the ailing economy. 

Today’s Market

The Dow Jones Industrial Average jumped 298.76 points, or 3.46%, to 8934.18, the S&P 500 added 33.63 points, or 3.84%, to 909.70 and the Nasdaq Composite picked up 62.43 points, or 4.14%, to 1571.74. The consumer-friendly FOX 50 gained 26.95 points, or 3.91%, to 716.17.

"Today’s rally builds upon the fact that the market was in a severely oversold position. That doesn’t mean that all of our problems are going away or that the housing crisis will see a miraculous” recovery," said Ken Polcari, managing director at ICAP Equities. 

While stocks were in the green throughout the day, the Dow failed to close above the 9000 level, an area unseen since November 5. Still, the gains build on Friday’s 260-point jump on the benchmark index, a rally that came despite new data showing the unemployment rate soared to 15-year highs in November as employers slashed more than a half a million jobs. 

Monday was no different as the markets shrugged off more evidence that the recession is hurting major companies. Dow component 3M (MMM) and Dow Chemical (DOW) both announced job cuts. Also, Tribune Co., the owner of the Los Angeles Times and Chicago Cubs, filed for Chapter 11 bankruptcy protection, citing a "perfect storm" of economic and credit troubles. 

"It's a continuation of what we saw last week. The market is simply in a phase where it is choosing to ignore the bad news and is looking forward. It's telling us, at least in the short-term, that a lot of this bad news is baked in," NYSE trader Ted Weisberg of Seaport Securities told FOX Business.

More than half of the Dow's 30 components ended with gains of at least 5%, led by double-digit percentage jumps from aluminum titan Alcoa (AA), General Motors (GM) and Bank of America (BAC). Credit card giant American Express (AXP) and Caterpillar (CAT) rose sharply as well. On the other hand, 3M (MMM) and McDonald's (MCD) failed to join the rally.

The Nasdaq 100 was led higher by infrastructure-related companies Steel Dynamics (STLD) and Foster Wheeler (FWLT). Tech giants like Dell (DELL) and Google (GOOG) also saw big gains.

Wall Street wasn’t alone rallying on bad news as global markets soared, led by a 8.7% surge from France's CAC 40 Index and a 7.6% rally from Germany's DAX. Hong Kong's Hang Seng Index rose even further, jumping nearly 9%. 

Markets Pop on Stimulus Talk

Wall Street's rally likely began over the weekend when Obama unveiled new details about his economic stimulus package.  While he declined to give a price tag on his recovery efforts, Obama promised to create "millions of jobs by making the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s."

Obama's public works plan will focus on broadband Internet access, installing energy efficient lighting and other devices, along with more basic needs such as sewer systems, mass transit, electrical grids and dams, among others.

“Obama is really the one taking the reigns. He’s actually shown great leadership. I think the market likes that,” said Polcari.

The Obama plan clearly had a big impact on basic material names like Alcoa and AK Steel (AKS), as well as construction equipment companies like Deere (DE) and United Rentals (URI). 

Rescue Progress Boosts Stocks

While the markets were lifted by breakthroughs made on legislation aimed at saving the nation's auto industry from collapse, the White House expressed concern about the bill late on Monday. Detroit is asking for $34 billion in emergency loans but lawmakers are nearing a deal to provide at least $15 billion in short-term loans, likely enough to bridge the gap until the new Congress and administration can take up the matter next year. 

According to published reports, the legislation may include a new oversight board for the Big Three, stock warrants for the government, limits on executive pay, dividend curbs and other concessions. Also, the United Auto Workers union is likely to seek a seat on GM's board of directors and an equity stake in the manufacturer, The Wall Street Journal reported.

Commodities rose across the board on Monday, even crude oil futures, which had been mired in a six-day losing streak. The price of a barrel of crude ended at $43.71, up $2.90 on the day. The gains come after a week that saw crude oil futures plummet by 25% to four-year lows on fears of a deep recession.

Corporate Movers

Tribune Co., which owns the Los Angeles Times, Chicago Tribune, and Chicago Cubs, filed for Chapter 11 bankruptcy protection Monday afternoon. 

The New York Times Co. (NYT) plans to borrow up to $225 million against its new Manhattan headquarters in an effort to ease a potential cash flow squeeze, The New York Times reported.

Dow Chemical (DOW) released plans to shut 20 facilities and cut 5,000 jobs, or 11% of its headcount, as part of “transformational” plans aimed at cutting annual costs by $700 million.

3M (MMM) cut its 2008 earnings forecast below Wall Street expectations and announced plans to cut 1,800 jobs. The manufacturer also said it is encouraging workers to take unpaid leave and vacation time this month.

Merrill Lynch (MER) CEO John Thain, who orchestrated the bank's sale to Bank of America (BAC), is seeking a 2008 bonus of as much as $10 million despite an industry-wide resistance to bonuses, according to the Journal. 

Morgan Stanley (MS) CEO John Mack, whose firm received a $10 billion capital injection from the government, won’t take a bonus in 2008, mirroring his decision to forgo payment at the end of last year, the Journal reported. 

Anheuser-Busch-InBev (AHBVF), the newly formed Brewing giant, announced it will slash 1,400 U.S. jobs. 

Wal-Mart (WMT) will begin selling Apple’s (AAPL) popular iPhone device on a limited basis on Dec. 27 and with a widespread rollout on Dec. 28 and Dec. 29, FOX Business confirmed. 

MetLife (MET) released 2009 earnings guidance that missed expectations but also echoed rival Hartford Financial (HIG) by saying it is strongly capitalized.

JPMorgan Chase (JPM) saw its share price rise after influential Ladenburg Thalmann analyst Dick Bove upgraded the bank to "buy" from "neutral." Bove cut his 2008 earnings forecast but raised his 2009 outlook and price target. 

NYSE Euronext (NYX) rose by nearly one-quarter after a weekend of merger speculation. German magazine Der Spiegel reported NYSE and Deutsche Boerse, a German stock exchange operator, were talking about a merger. 

McDonald's (MCD) posted a 7.7% rise in global same-store sales in November even as domestic sales rose just 4.5%. 

Chesapeake Energy (CHK) jumped away from five-year lows after the natural gas company scaled back its common stock sale plans. The move helped ease liquidity and dilution fears. 

Playboy (PLA) saw its shares soar after the company said Christie Hefner plans to step down as chairman and CEO after two decades at the helm.