Wall Street extended its huge rally as investors stormed back into the market, relieved that the government plans to rescue banks from billions of dollars in bad debt.

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Based on preliminary data, the Dow gained nearly 369 points to 11,388, making for a two-day total gain of more than 700 points.

The Bush administration sketched out a multifaceted effort on Friday to confront the worst U.S. financial crisis in decades, outlining a program that could cost taxpayers hundreds of billions of dollars to buy up bad mortgages and other toxic debt.

President George W. Bush, flanked by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, acknowledged that the program will put a "significant amount of taxpayers' money on the line."

The administration is asking Congress to give it sweeping new powers to execute the plan. Paulson said it "needs to be big enough to make a real difference and get to the heart of the problem."

Paulson gave few details but said he would work through the weekend with leaders of Congress from both parties to flesh out the program, the biggest proposed government intervention in financial markets since the Great Depression. Members of the Senate Banking Committee said they had yet to receive details of the proposal, but were ready to move quickly when they do.

Before the markets opened, the government announced plans to temporarily insure money-market deposits and to block short-selling in financial securities. Short selling is a trading method that bets the stocks will go down.

Speaking to reporters at the Treasury Department, Paulson said that the new troubled-asset relief program that he wants Congress to enact must be large enough to have the necessary impact while protecting taxpayers as much as possible.

"I am convinced that this bold approach will cost American families far less than the alternative -- a continuing series of financial institution failures and frozen credit markets unable to fund economic expansion," Paulson said in a prepared statement.

"The financial security of all Americans ... depends on our ability to restore our financial institutions to a sound footing," he said.

Paulson said mortgage giants Fannie Mae and Freddie Mac will step up their purchases of mortgage-backed securities to help provide support to the crippled housing market.

He also said the Treasury Department will expand a program, announced earlier this month, to buy mortgage-backed securities, which have been badly hurt by the housing and credit crises.

"As we all know, lax lending practices earlier this decade led to irresponsible lending and irresponsible borrowing. This simply put too many families into mortgages they could not afford," Paulson said.

At a news conference in which he only took three questions, Paulson was asked the approximate dollar size of the government intervention. "We're talking hundreds of billions," he said.

Paulson did not address specifics about the plan to buy back bad debt or whether the government would take a direct stake in troubled banks in exchange for its help.

Costly Plan

Senate Banking Committee Chairman Chris Dodd said the government's financial rescue plan will be costly, and he is demanding more details about the program to confront the worst financial crisis in decades.

"We're anxious to hear the specifics. None of us have any idea what the details are. We understand the gravity of the moment," Dodd told reporters.

Republicans and Democrats on Dodd's panel met at the Capitol and emerged vowing to put politics aside and develop a solution to the financial crisis. Dodd is a Democrat from Connecticut.

The ranking Republican on the Banking Committee, Sen. Richard Shelby, predicted the new bailout plan will cost at least half a trillion dollars.

Shelby said the nation has "been lurching from one crisis to another." Both veteran lawmakers said this is the most serious financial crisis they've seen in their years in Congress.

A New York analyst said the biggest bonus is that the plan is meant to help the banking industry as a whole. Until now, the Treasury and Fed have selectively bailed out institutions that were the most vulnerable.

SEC Bans Short-Selling

The SEC has taken the dramatic step of temporarily banning the routine practice of betting against company stocks.

The move, announced early Friday on the agency's Web site, may well be unprecedented and a reflection of regulators' concern about the widening scope of the financial crisis as entreaties come from all quarters to stem a swarm of short-selling.

In the announcement, the commission said it was acting in concert with the U.K. Financial Services Authority in taking temporary emergency action to "prohibit short-selling in financial companies" to protect the integrity of the securities market and boost investor confidence.

Short-selling, in which investors sell borrowed shares hoping to buy them back at a lower price and pocket the difference, has been blamed for sending banks' share prices plummeting.