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Stocks close high on Japan action

Wall Street stocks close sharply higher, after the Japanese government finally moved to take concrete steps to help its crippled banking system.

Wall Street stocks closed sharply higher today, following the lead of the overseas markets which soared after the Japanese government finally moved to take concrete steps to help its crippled banking system.

The Dow Jones Industrial Average shot up by as much as 185.12 points today but closed with just more than a 100-point gain. The blue chip closed up 101.95 points, or 1.29 percent, to 8,001.47. The technology-heavy Nasdaq Composite Index rose by as much as 67.76 points before closing up 53.61 points, or 3.59 percent, at 1,546.1.

"Every market from East to West is up," said Bill Meehan, chief market analyst at Cantor Fitzgerald. "The banking reform legislation in Japan working through both houses is helping."

Today's jump comes on the heels of Friday's rally that pushed the blue chip up 167.61 points amid growing anticipation that the Federal Reserve may cut interest rates again to curtail damage to the U.S. economy inflicted from the global financial turmoil.

Although the Fed has not made any moves to further cut rates since its quarter-percent cut in September, other positive news is helping global markets today.

Japan's Upper House voted into law measures that were proposed jointly by the ruling party and key opposition groups, on liquidating or nationalizing failed banks.

In addition, the ruling party moved toward accepting a plan proposed by its main opposition which calls for up to $577 billion in public funds. The plan calls for additional funds to recapitalize some banks while nationalizing others in order to try to stabilize Japan's financial sector.

"Pumping huge amounts of public money into the banks in Japan is good news for financial stocks," Meehan said.

Japan's Nikkei Index today soared 5.24 percent, or 675.04 points, to 13,555.01. Hong Kong's Hang Seng rose 5.68 percent, or 483.48 points, to 8,990.27.

Reuters contributed to this report.