New York  - US stocks staged the biggest rally since November after the US government unveiled the details of a long-awaited plan to take toxic mortgage assets off the balance sheets of US banks.

Treasury Secretary Timothy Geithner put forward a 1-trillion- dollar public-private partnership that the administration hopes will go a long way to stabilize the crumbling US financial system.

The Dow Jones Industrial Average posted its fifth-largest points gain in history, and US financial firms gained 18 per cent on the announcement.

Under the plan, private investors would be enticed back into the mortgage securities and loans market through a combination of government guarantees and up to 100 billion dollars in taxpayer subsidies.

A broad outline of the plan had already been unveiled last month, but the details provided Monday sent stocks surging around the world. The Euro Stoxx 50 and Japan's Nikkei Average both jumped more than 3 per cent.

Monday's rally has followed a steady increase in global stocks over the last week, amid slightly rosier economic data emerging in the midst of the global recession. US indices have pulled back from 12-year lows reached at the beginning of March.

The blue-chip Dow Jones Industrial Average surged 497.48 points, or 6.84 per cent, to 7,775.86. The broader Standard & Poor's 500 Index jumped 54.38 points, or 7.08 per cent, to 822.92. The technology-heavy Nasdaq Composite Index rallied 98.5 points, or 6.76 per cent, to 1,555.77.

The US currency fell against the euro to 73.33 euro cents from 73.63 euro cents on Friday, and the dollar climbed to 97.06 Japanese yen from 95.92 yen. (dpa)