The Dow jumped more than 900 points, a huge surge that accelerated in the last hour. The Standard & Poor's 500 Index jumped 11.58%.
It was the biggest gain ever for the Dow, the biggest in 75 years for the S&P 500.
The S&P 500 rose 104.13 points to 1,003.35; the Dow 936.42, or 11%, to 9,387.61; its its best percentage advance since March 1933. Nasdaq increased 194.74, or 11.8% to 1,844.25.
Oil rose $US4a barrel to just over $US81.50, copper jumped 19.5 US cents to $US2.34 a pound, but gold shed $US22 to $US837 an ounce. the Aussie dollar jumped past 69 US cents in early Asian trading today.
London's Footsie finished up closed up 8.3%, the second biggest one-day gain on record, after the UK Government revealed its plans to inject £37 billion into three of the country's biggest banks.
The MSCI World Index rose by almost 7%, Europe'sDow Jones Stoxx 600 Index added 9.9% for its biggest rise ever and the MSCI Asia Pacific excluding Japan Index ended 7.4% higher..
Other European stock markets followed as Germany, France, Spain, Austria and the Netherlands announced their plans, Italy's cabinet passed a new decree offering more support to the financial sector, and the Spanish government approved a guarantee for issues of new bank debt.
Frankfurt's Xetra Dax closed up 11.4%, while the CAC 40 in Paris rose 11.2%.
The UK revealed plans to bailout its banks, taking big stakes in Royal Bank of Scotland and the combined HBOS/Lloyds TSB bank.
Senior management were sacked in some cases and the banks being helped agreed to eliminate dividends until the loans had been paid back.
The euro climbed the most in three weeks against the US dollar as concern eased that more banks will fail.
Oil rose from a 13-month low on speculation the bailout may avert a collapse of the financial system that threatens economic growth. Copper rose and gold rose, fell and rose during a long day's trading.
Australia had its biggest rise in 11 years, up 5.6%, Hong Kong finished 10% higher.
Australia closed up 220 points, or 5.6%, to 4,180.7 points, recovering much of Friday's 8.2% rout.
Asia's largest stock market in Tokyo was closed for a public holiday after slumping 24% last week.
India's Sensitive Index added 6.4%. Hong Kong's Hang Seng Index rallied 6.6%.
Indonesia's Jakarta Composite Index fell 3.4%, as trading resumed after a three-day halt. Taiwan's Taiex Index lost 2.2% following a holiday on Friday.
Here banking stocks led the market higher.
The ANZ ended the day at its highs, adding 13%, or $2, to $17.30; the Commonwealth rose 6.7%, or $2.65, to $42.20; the NAB was up 7.7%, or $1.60, to $22.40 and Westpac jumped 9%, or $1.81, to $22..
St George jumped 9.8%, or $2.47, to $27.66, Suncorp fell 2.4%, or 22 cents, to $9.05 after announcing that it was reconsidering the sale of assets, reversing early gains. Macquarie Bank was also higher, as were BHP Billiton and Rio Tinto.
