Lennar, Genworth, AFLAC lead Wall Street charge

NEW YORK (CNNMoney.com) -- Traders bought up stocks fast and furiously on Monday, with Lennar, AFLAC and Genworth Financial leading the S&P 500.

Lennar Corp., (LEN) a home construction company, was the lead S&P stock at the market's close, with gains of about 13%.

Bob Tull, COO of Old Mutual Global Index Trackers, said that Lennar is riding a wave of optimism about the recovering housing industry, given the recent declines in mortgage rates and the dramatic rise in new home sales.

Genworth Financial (GNW, Fortune 500), a financial security company that sells long-term care and life insurance, and AFLAC (AFL, Fortune 500), an insurer with a talking duck for a mascot, both jumped more than 12%.

Tull said that both companies specialize in security, with AFLAC providing disability insurance for workers and Genworth providing retirement protection.

He said that AFLAC is benefiting from the fact that more people are returning to work and need disability insurance, while Genworth is feeding off fears that "retirement is a pipe dream."

AFLAC was one of the top players throughout the day. Earlier winners included American Education Services (AES, Fortune 500), a lender that provides student loans and financial aid; ProLogis (PLD), which leases industrial space; and SanDisk (SNDK), a maker of flash memory cards. All these companies gained at least 10% during the morning session.

Not surprisingly, the highest volume stocks were blue chips like Citigroup (C, Fortune 500), Bank of America (BAC, Fortune 500), Ford Motor (F, Fortune 500) and General Electric (GE, Fortune 500), following their trend from Friday. All of these stocks gained from 5% to 7%.

"With their stock at $4, you've almost got to believe that it's undervalued," said Tull, referring to the most-traded stock, Citigroup. "Anytime you've got a stock that's under $5 a share, there's a lot more speculative interest in it."

It was hard not to make gains. Within seconds of the opening bell, the Dow Jones industrial average surged more than 200 points. Just seven minutes into trading, the Dow was up 400 points.

The rally is fueled by a European rescue package of nearly $1 trillion from the European Union and the International Monetary Fund.

European banks traded on the U.S. stock market made significant gains. National Bank of Greece (NBG), Allied Irish Banks (AIB), The Bank of Ireland (IRE), and the Spanish banks Banco Santander (STD) and Banco Bilbao Viscaya Argentaria (BBVA), each made double-digit percentage gains. The Spanish banks rose about 20%.

Tull described the bailout package as the "most significant decision that [the Euro Zone] has made since the formation of the euro." He said that the banks are riding on "an implicit trust factor that this zone is going to stay together; it's going to be long term."

The worst performers included Dean Food (DF, Fortune 500), which lost more than 28% after posting disappointing earnings, and Moody's Corp., (MCO) which dropped nearly 7% after disclosing on Friday that it could face enforcement action from the Securities and Exchange Commission.

The markets have experienced extreme volatility since Thursday, when the Dow went on a wild ride, taking an historic plunge of nearly 1,000 points before partially recovering to close down 348.

Citigroup denied rumors that a trading error on its part had sparked the furious sell-off.