Stocks jump in early trading

NEW YORK (CNNMoney.com) -- Stocks gained Tuesday morning after the government said it was preparing to buy billions in bad mortgage debt and also set up a program to help companies that provide consumer loans.

The Dow Jones industrial average (INDU) and the Standard & Poor's 500 (SPX) index gained in the early going, while the Nasdaq composite (COMP) was little changed.

Investors welcomed the government announcements, particularly in the wake of the morning's weak revised reading on gross domestic product. The plan includes the Federal Reserve buying $600 billion in mortgage-related debt and the Treasury accessing $20 billion from the Troubled Asset Relief Program (TARP) to boost consumer credit.

Stocks surged Monday after the United States agreed to rescue financial giant Citigroup (C, Fortune 500) and President-elect Obama unveiled his picks for his economic team. The Dow climbed 4.9%, the S&P 500 rallied 6.4% and the Nasdaq composite soared 6.3%.

The Dow has gained 891.10 points over the last two sessions, the biggest advance over that period ever, according to Dow Jones. The two-day percentage gain of 11.8% was the biggest since 1987.

Art Hogan, chief market strategist at Jefferies & Co., said this was the first two-day rally since Sept. 17. The bounce was fueled by new information concerning President-elect Barack Obama's cabinet, the Citigroup bailout and Treasury's Troubled Asset Relief Program, which alleviated investor uncertainty, said Hogan.

Hogan said the new information from the Treasury and the Federal Reserve "answers the questions that we had about how the TARP was going to be used on a going-forward basis."

He added that any new information about the bailout could serve as "positive catalysts" in alleviating investor uncertainty.

"We need some stability in this market," said Hogan.

Asian markets rallied Tuesday, with Japan's Nikkei surging more than 5% at the close, and Hong Kong's Hang Seng rising 3.4%. European markets were higher, with London's FTSE, the CAC in Paris and the Dax in Frankfurt all rising more than 2%.

Troubled banks: The Federal Deposit Insurance Corp. is scheduled to provide an update on the number of banks on its list of troubled institutions. The report will also provide the latest details on the health of the banking industry.

Economy: The Commerce Department announced a 0.5% annual rate decline in gross domestic product during the third quarter, the biggest drop in seven years. This is lower than the initially reported decline of 0.3%. It matches the expectations from a consensus of economist projections from Briefing.com.

The Conference Board will release its November reading on consumer confidence at 10 a.m. ET. The index is expected to creep upwards to 39.5, from the prior month's index of 38, according to a consensus of economist projections from Briefing.com.

Investors are bracing themselves for a deluge of economic reports on Wednesday, including initial unemployment claims, new home sales and personal income.

Companies: Mining giant BHP Billiton (BHP) abandoned its bid for rival Rio Tinto (RTP), citing the downturn in the global economy and decline in commodity prices.

Oil and money: The dollar fell versus the British pound, the euro and the yen. Oil fell $1.92 a barrel to $52.61 on the New York Mercantile Exchange.