U.S. stocks ended sharply higher Monday after the government seized mortgage giants Fannie Mae and Freddie Mac to prevent trillions of dollars in mortgage-backed securities from defaulting and to bring down mortgage rates nationwide.

The Dow Jones Industrial Average gained 289 points, or 2.6%, to end at 11,510, with 29 of its 30 components advancing. The advance among blue chips was led by a 7.8% rise in Bank of America, one of several major banks in competition with Fannie Mae. The S&P 500 index gained 25 points, or 2%, to end at 1,267, while the Nasdaq Composite rose 13 points, or 0.6%, to 2,269.

Tags: dow jones , fannie mae , freddie mac , nasdaq , s&p 500