New York - Wall Street continued its gains on Tuesday amid a US announcement that the government would spend 250 billion dollars to take stakes in banks.

The gains followed a massive rally of more than 11 per cent on major US indices a day earlier, in which the Dow Jones Industrial Average gained the most points ever and the broader Standard & Poor's 500 Index recorded its largest percentage increase in nearly 70 years. The boost came after large declines a week earlier amid the financial crisis that has prompted large-scale government interventions and spooked investors.

In the first hour of trading, the Dow gained 146.31 points, or 1.56 per cent, to 9,533.92. The S&P 500 picked up 14.97 points, or 1.49 per cent, to 1,018.32 by 10:30 am (1430 am). The technology- heavy Nasdaq Composite Index fell 8.26 points, or 0.45 per cent, to 1,835.99.

Before US markets opened, President George W Bush said the government would infuse 250 billion dollars into the American banking sector as part of a systematic global strategy to calm markets and ensure "growth and prosperity."

The announcement followed coordinated moves by key European governments since the weekend to inject unprecedented amounts of state cash into their reeling banks.

"Nations around the world are working together to overcome this challenge, and with confidence and determination, we will return our economies to the path of growth and prosperity," Bush said. (dpa)