WASHINGTON -- The Treasury Department and Federal Reserve will announce a new, comprehensive financial rescue package Tuesday morning that includes guaranteeing loans between banks and taking direct stakes in troubled banks.

These plans include using about $250 billion from the $700 billion financial rescue plan recently passed by Congress to provide a capital infusion, via buying equity stakes, to about nine struggling financial firms, according to officials familiar with the plan.

Another element will provide a Federal Deposit Insurance Corp. guarantee to interbank lending, the loans that banks normally give each other overnight or for a short period of time. This lending has dried up as banks fear lending to an institution that may prove unable to repay. The shutdown of interbank lending has caused a global credit crunch that threatens to turn into a global recession.

President Bush will meet with a working group of the nation's top financial regulators early Tuesday, and will then make a statement from the White House Rose Garden before U.S. financial markets open.

The Dow Jones Industrial Average closed up 936.42 points to 9,387.61 as executives from leading banks were summoned by the Bush administration to Washington to work out a plan to get loans moving again. And it followed signals that European governments would put nearly $2 trillion on the line to protect their own banks.

The broader S&P 500 rallied Monday to close up 104.13 points to 1003.35, while the tech-heavy Nasdaq enjoyed a leap of 194.74 points to 1844.25.

All of these are efforts to halt the global financial crisis in its tracks and reflect strong steps announced by European nations over the weekend and Monday to do the same.

The new Bush administration approach reflects how a galloping global financial crisis has quickly outpaced its earlier plan, which sought to spark lending between banks and to corporations by removing distressed assets from bank balance sheets.

Delays in passing this plan in Congress and later strife between European nations as they tried to forge a comprehensive approach sent global financial markets crashing last week. Over the weekend, European leaders rallied behind plans suggested by Britain and adopted a program of interbank loan guarantees and governments taking equity stakes in banks.

On Tuesday, Washington will endorse the same approach.

''You have to recognize that it wasn't policy coordination, it was policy emulation in global capital markets, where financial firms have their footprints in many markets,'' said Vince Reinhart, a former chief economist of the Fed's rate-setting Open Market Committee. ``If you do it in one market, you are going to have to do it in another. And that is what happened to the Treasury. Markets work a lot faster than action plans.''

Heartened by expectations that the U.S. Treasury and the Fed would soon embrace Europe's aggressive moves, Wall Street traders sent U.S. stocks stampeding back to life on Monday.

HELP FROM EUROPE

Boosting stocks too was the sheer size of the British and other European financial rescue efforts. Leaders of Germany, France, Britain and other nations on Monday put price tags on the plans they had loosely unveiled on Sunday. Together, the British and other European plans involved pledges exceeding $2.5 trillion to restore confidence in fragile financial markets.

London's FTSE exchange responded by rising 8.3 percent, the second highest percentage close on record, according to British newspapers. Exchanges in France and Germany were up 11.2 percent and 11.4 percent respectively. Hong Kong's Hang Seng index started the global rally, closing Monday up 10.2 percent.

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