YAHOO [BRIEFING.COM]: Stocks and commodities soared Monday on news of a government rescue plan for Citigroup (C 5.85, +2.08) that includes a direct $20 billion investment and $306 billion in asset guarantees.  The S&P 500 rose 6.4%, with gains exacerbated by short-covering and bargain hunting.

Shares of Citi plunged 60% last week, sparking the need for a bailout. The Treasury will buy $20 billion in Citigroup preferred stock using TARP funds, bringing the Treasury's total investment in Citi to $45 billion. In addition, the Treasury, Fed and FDIC will provide guarantees for up to $306 billion of troubled assets in exchange for $7 billion in preferred stock and warrants for 254 million shares of common stock at a strike price of $10.61. Citi will absorb the first $29 billion in losses on the troubled assets and then 10% on any remaining losses, while the government will cover the remaining 90% in losses. 

Under the deal, Citi must get an executive compensation plan approved by the government and must not pay a quarterly dividend larger than $0.01 without government consent.

President-elect Obama unveiled his economic team, confirming that New York Fed President Tim Geithner is the Treasury Secretary nomination.  Obama said that a "big" economic stimulus package is needed, but did not give any specific numbers.  Obama did not say he would postpone raising taxes on the richest Americans as some had hoped for, but will listen to what his economic team says about letting the Bush tax cuts expire.

In economic news, existing home sales continue to show signs of stabilization at very depressed levels. October existing home sales fell 3.1% month-over-month on a seasonally adjusted annual basis to 4.98 million, which is close to the consensus estimate of 5.00 million.  The median home price decline of 11.3% year-over-year to $183,300 is the largest on record.

All ten sectors posted a gain. The financial sector rose the most, spiking 18.5% -- the most in its 20 year history -- with Citi climbing 55%.  Defensive sectors underperformed on a relative basis as utilities rose only 1.3% and Treasuries fell as investors showed an increased willingness to take on risk.

Meanwhile, commodities rallied 5.4% as oil prices spiked 9.1% to $54.48 per barrel and gold rose 4.0% to $823.70 per ounce.  The strength in the stock market and a 2.4% decline in the dollar fueled the buying interest.

The S&P 500 is now up 14.9% from its more than 10-year low reached on November 21, but is still down 42.0% year-to-date.DJ30 +396.97 NASDAQ +87.67 NQ100 +6.3% R2K +7.4% SP400 +7.5% SP500 +51.78 NASDAQ Adv/Vol/Dec 2119/2.55 bln/651 NYSE Adv/Vol/Dec 2828/2.04 bln/362