The rollercoaster ride on Wall Street continues; on Monday stocks shot-up as investors bought into beaten down shares of financial companies. The markets also got a boost from speculation the Federal Reserve may take steps to reassure investors at its policy meeting.

The central bank is expected to leave interest rates untouched at 5.25%. It's also interesting to note that shares of Bear Stearns rose 5 per cent after a Standard & Poor's analyst said the market's dramatic response to its outlook change on Friday was a "vast overreaction."

On Monday, The Dow Jones Industrials soared 287 points closing at 13,469 which was its biggest daily point gain of the year; the S&P500 ended 35 points stronger at 1,468, and the Nasdaq is up 36 points to finish at 2,547.

But don't let the numbers fool you; there is still plenty of stress being felt in the credit markets, with the mortgage market at the root of the problem. Luminent Mortgage Capital was placed on a trading halt after its shares tumbled more than 31.28% to $4.35 on Monday. Just last week the company said it was in full compliance with all its financial covenants and had ample liquidity to manage its business. Not only that but it had expected to pay a 32 cents a share dividend to stockholders in a couple of days. There has been no update from the company since then.

However things are looking a bit better for Novastar Financial. Shares in the subprime lender plummeted over 35 per cent after it announced on Friday it would temporarily suspend funding some of its loans. However the company said it would resume funding wholesales mortgages on Tuesday, lifting its shares 5.94% to $6.78 in late afternoon trading on the NYSE. Novastar blamed the suspension on a disruption in the secondary market, where it was having trouble selling wholesale loans originated through its broker network.