Reuters Obama mortgage plan news spurs late market rally

NEW YORK (Reuters) - Stocks staged a late rally to close mostly higher on Thursday after Reuters reported the Obama administration was working on a program to subsidize mortgage payments for troubled homeowners.

The S&P 500 and Nasdaq ended higher while the Dow industrials retraced losses to close slightly lower as investors starved for good news bet the government had taken a big step toward stabilizing the housing market.

Banks and homebuilders, which had helped drag the market lower throughout the session, more than halved their losses after Reuters reported the government was working on a program that would help homeowners most in need before they fall into arrears.

"It's being viewed as a positive both for the mortgage industry and home building industry as well," said Richard Sparks, senior equities analyst at Schaeffer's Investment Research in Cincinnati, Ohio. more...