The S&P 500 index was the best performer among the leading indices, rising 5.4 per cent to 712.95, but other equity markets in New York, London, Frankfurt, Paris and Hong Kong, where the rally began, were all higher by between 3 and 5 per cent.
There were few concrete reasons to explain the rebound, but analysts and traders pointed to an internal staff memo circulated by the Citigroup chief executive, Vikram Pandit, claiming the bank had been profitable in the first two months of the year. Citi stock leapt more than 35 per cent on the news to $1.42.
Following this news, Ben Bernanke called for co-ordinated global action to overhaul the financial system in a speech to the Council on Foreign relations. He also repeated his view that if the banks can be stabilised, the recession should end this year.