Major stock indexes were flat as investors mulled whether the government’s bailout of Fannie Mae and Freddie Mac will affect the root of the mortgage crisis — falling home prices and increasing rates of foreclosures.

Just after the opening bell, the Dow Jones Industrial Average was up 0,33% at 11547. The Nasdaq Composite Index up 0.45% to 2279.25. The S&P 500 fell 0.19% to 1265. [Read more]

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.

Financial-sector shares rallied strongly Monday, reacting to the U.S. government taking control of Fannie Mae and Freddie Mac over the weekend, ending months of speculation about the future of the mortgage giants and reassuring investors that they will not be allowed to fail.

Just after the opening bell, the Dow Jones Industrial Average was up almost 336 points, or 3%%, at 11555.84, erasing all of last week’s decline and then some. The Nasdaq Composite Index was up 2%, trading just above 2300. The S&P 500 was up 2.1% at 1268.53, led by a nearly 7% rise in its financial sector.

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US futures surged amid news of the bail-out of Fannie mae and Freddie mac. Reacting to the Sunday’s news, futures opened higher with gains more than 1,5% each.

Now S&P futures are trading at 1275 levels up around 2,8% and Dow Futures are trading around 11400 up 2,19%.

European shares surged at the start on Monday, with financials and commodity stocks shooting higher, after the U.S. government bailed out home mortgage giants Fannie Mae and Freddie Mac. [Read more]

The U.S. Treasury is expected to announce early Sunday afternoon details of a plan under which regulators will effectively take temporary control over government-sponsored mortgage investors Fannie Mae and Freddie Mac. [Read more]

WSJ reported that the Treasury Department is close to finalizing a plan to help shore up mortgage giants Fannie Mae and Freddie Mac, according to people familiar with the matter.

The details of the plan couldn’t be learned. The plan includes changes to senior management at both companies, according to a person familiar with the plans.