YAHOO [BRIEFING.COM]: The Treasury Department released details related to its plan to remove bad assets from banks' balance sheets, sparking a massive surge in the stock market. In addition, the market benefited from a better-than-expected existing home sales report.

In the end, the S&P 500 spiked 7.1%, settling at session highs thanks to a late afternoon rally.

The Treasury plans to create a series of public-private investments funds to buy $500 billion to $1000 billion in legacy loans and securities. To encourage participation from the private sector, the government is taking on much of the risk and offering subsidies. In a show of support, Bill Gross, co-Chief Investment Officer of the world's largest bond fund, told Reuters that Pimco plans to participate in the program.

Meanwhile, FDIC Chairman Bair said that the public-private investment program will likely make money for the FDIC, according to Reuters. Bair also said that 6-to-1 is the outer range of leverage it will provide for the program, Reuters reported.

The financial sector rallied a massive 17% on the news, with diversified financial services climbing 24.5% and diversified banks up 22.3%.

The move was broad-based as all ten of the economic sectors rose, with gains of at least 3.8%. The energy sector (+7.8%) finished second to financials,  outperforming as May crude oil futures climbed 3.5%. Defensive sectors however, underperformed on a relative basis, but still posted solid advances.

In economic news, existing home sales in February rose 5.1% month-over-month to a seasonally adjusted annual rate of 4.72 million, according to the National Association of Realtors. Economists expected a 0.9% month-over-month drop to 4.45 million. A substantial portion of the sales were from first time homebuyers and distressed properties.

The increase is a positive for the market, though sales still remain at depressed levels. While low interest rates and increased affordability are encouraging developments, the housing sector continues to face high levels of inventory, tight credit conditions and the deleveraging of consumers.

Looking ahead, Bernanke and Geithner testify to the House Financial Services Committee on AIG (AIG 1.48, +0.22) at 10:00ET tomorrow morning.DJ30 +497.48 NASDAQ +98.50 SP500 +54.38 NASDAQ Adv/Vol/Dec 2262/2.26 bln/429 NYSE Adv/Vol/Dec 2863/1.91 bln/259