News of an agreement to freeze adjustable rates on subprime mortgages boosted investor enthusiasm to lift the markets to a sharply higher close. The Dow leaped 175 points to 13,620 while Nasdaq surged 43 points to 2709.

On the upside

Fleetwood Enterprises (NYSE: FLE) narrowed second quarter losses as expenses dropped.

Second quarter earnings surged for Methode Electronics (NYSE: MEI) as international sales rose prompting the electronics components maker to lift its fiscal 2008 outlook.

Shares of homebuilder Hovnanian Enterprises (NYSE: HOV) climbed after the federal government announced a plan to assist homeowners with adjustable rate mortgages.

On the downside

OceanFreight (Nasdaq: OCNF) announced the departures of CEO Robert Cowen and CFO James Christodoulou.

Savvis (Nasdaq: SVVS) blamed additional costs for reducing its fourth quarter earnings guidance.

Moody's Investor Services cited Verifone's (NYSE: PAY) intention to restate 2007 financial statements for warning the electronic payment solutions provider of a possible downgrade.

In the broad market, advancing issues outpaced decliners by a margin of nearly 4 to 1 on the NYSE and by nearly 8 to 3 on Nasdaq. The Russell 2000 which tracks small cap stocks jumped 21 points to 787.