Sept. 24 (Bloomberg) -- U.S. stock futures rallied after investor Warren Buffett's purchase of a $5 billion stake in Goldman Sachs Group Inc. and endorsement of the Treasury's plan to shore up banks bolstered confidence in the financial system.

Goldman, which this week transformed itself from a securities firm into a bank holding company, added 5 percent after saying Buffett's Berkshire Hathaway Inc. will buy preferred shares and the company will issue common stock in a $10 billion capital-raising plan. Morgan Stanley, which is also converting into a bank, climbed 4.3 percent. Shares in Europe and Asia were little changed.

Futures indicated the Standard & Poor's 500 Index will rebound after concern that Congress will hold up a $700 billion bank bailout plan helped send the benchmark for American equities to its worst two-day slump in six years.

``It's definitely a vote of confidence, one of the smartest long-term investors putting money up,'' said Ralph Shive, chief investment officer at South Bend, Indiana-based 1st Source Corp. Investment Advisors, which manages $3 billion. ``In the context of the financial bonfire, he poured a little water on the fire, which is positive in the short term.''

S&P 500 futures expiring in December rallied 9.7 points, or 0.8 percent, to 1,196.7 at 9:13 a.m. in New York. Dow Jones Industrial Average futures added 76 to 10,930. Nasdaq-100 Index futures rose 17.5 to 1,668. Europe's Dow Jones Stoxx 600 Index added 0.1 percent. The MSCI Asia Pacific Index fell less than 0.1 percent.

Bailout Debated

U.S. stocks declined yesterday as Federal Reserve Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson urged Congress to quickly pass a rescue for financial institutions, saying the U.S. economy will shrink if markets don't begin functioning normally. Lawmakers expressed objections.

Senator Sherrod Brown, a Democrat from Ohio, said his constituents hold a ``universally negative'' opinion toward the proposal, while Senator Jim Bunning, a Kentucky Republican, said the plan would ``take Wall Street's pain and spread it to the taxpayers.''

The S&P 500 is down 24 percent since its October record on concern more than $500 billion in credit losses and writedowns at financial firms globally and a slowing economy will curb profits. The bankruptcy of Lehman Brothers Holdings Inc. and emergency sale of Merrill Lynch & Co. to Bank of America Corp. this month fueled concern about firms that rely on bond markets for funding.

Buffett's Buy

Goldman rose $5.95 to $131, extending yesterday's 3.5 percent increase. In addition to Buffett's investment, the most profitable firm on Wall Street plans to raise $5 billion in a stock offering, two people familiar with the situation said. Sumitomo Mitsui Financial Group Inc., Japan's second-biggest bank by market value, may invest in Goldman's offering, two people familiar with the plans said.

Berkshire's preferred shares pay a 10 percent dividend and the company is also getting warrants to buy $5 billion of common stock at $115 apiece, 8 percent less than Goldman's closing share price yesterday.

Buffett endorsed Paulson's plan in an interview this morning on CNBC, saying it was ``absolutely necessary'' to stem an ``economic Pearl Harbor.''

`No Plan B'

``The market could not have taken another week'' like last week, Buffett told the news channel. ``I think it was the last thing Hank Paulson wanted to do, but there's no Plan B for this.''

Morgan Stanley added $1.20 to $29.20. Japan's Mitsubishi UFJ Financial Group Inc. said Sept. 22 it will buy as much as 20 percent of the company.

Goldman and Morgan Stanley this week said they are converting to bank holding companies supervised by the Fed, a move that gives them permanent access to central bank borrowing and permits more flexible accounting for some assets.

JPMorgan Chase & Co., Bank of America Corp. and Washington Mutual Inc. all climbed at least 2 percent.

American International Group Inc. increased 4 percent to $5.20. The insurer taken over by the U.S. will give the government convertible preferred stock instead of the warrants originally proposed.

Investors looking for a way to modify or derail the takeover, which may give the U.S. a 79.9 percent stake, have been waiting for AIG to disclose definitive terms. Shareholders represented by attorney Mickey Kantor and including former Chief Executive Officer Maurice ``Hank'' Greenberg may try to raise money for AIG to avoid having their stakes diluted.

The Fed today said it has agreed to channel $30 billion into the global financial system by opening currency swap lines with central banks in Norway, Sweden, Denmark and Australia to address ``elevated pressures'' in dollar funding in markets worldwide.

Housing Slump

A National Association of Realtors' report to be released at 10 a.m. in Washington is forecast to show fewer Americans signed contracts to buy previously owned homes in August than in July, signaling the market remained in a slump heading into the latest financial meltdown, economists said.

Sales of existing homes probably dropped 1.2 percent last month to a 4.94 million annual pace, matching the year's average, according to the median estimate of economists surveyed by Bloomberg News.

Sequenom Inc. jumped 17 percent to $24. The company said its test to detect Down syndrome before birth correctly identified more than 200 samples in a study.

Juniper Networks Inc. declined 1.5 percent to $23.88 in Germany. Merrill Lynch & Co. downgraded shares of the second- largest maker of networking equipment to ``underperform'' from ``neutral'' and cut its price estimate to $24 from $27, citing concerns over a slowdown for networking vendors.

To contact the reporters on this story: Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net; Kyung Bok Cho in Seoul at kcho7@bloomberg.net.

Last Updated: September 24, 2008 09:15 EDT