NEW YORK » Financial markets grew more upbeat yesterday as political leaders said they struck an agreement in principle on a massive spending plan to revive the crippled financial system. The Dow Jones industrial average jumped about 200 points on optimism about the bailout, and demand for safe-haven assets remained high but eased slightly as some investors placed bets that a deal would help unclog credit markets.

Stock market investors got a lift when key lawmakers said they would present the $700 billion plan to the Bush administration and hoped for a vote by both houses of Congress within days. Still, some resistance remained from House Republicans as the closing bell on Wall Street rang ahead of a meeting of congressional leaders at the White House.

Demand eased but remained high for the 3-month Treasury bill, considered the safest short-term investment. Its yield rose to 0.72 percent from 0.49 percent late Wednesday. That means investors are still willing to earn the slimmest of returns in exchange for a safe place to put their money. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.84 percent from 3.81 late Wednesday.

The Dow rose 196.89, or 1.82 percent, to 11,022.06. The gain helped erase some of the losses from heavy selling earlier in the week, though the blue chips still remain down by more than 360 points, or 3.2 percent.

Broader stock indicators also rose yesterday. The Standard & Poor's 500 index advanced 23.31, or 1.97 percent, to 1,209.18 and the Nasdaq composite index rose 30.89, or 1.43 percent, to 2,186.57.

Advancing issues outnumbered decliners by nearly 3 to 1 on the New York Stock Exchange, where consolidated volume came to 5.73 billion shares, compared with 4.66 billion traded Wednesday.

The Russell 2000 index of smaller companies rose 7.97, or 1.14 percent, to 705.74.

The dollar was mixed against other major currencies yesterday, while gold prices fell.

Light, sweet crude for November delivery rose $2.29 to settle at $108.02 a barrel on the New York Mercantile Exchange.

The U.S. Labor Department said the number of people seeking unemployment benefits increased by 32,000 to a seasonally adjusted 493,000 last week - the highest level in seven years and well above analysts' expectations of 445,000.

The U.S. Commerce Department said sales of new homes fell sharply in August to the slowest pace in 17 years. The average sales price also fell by the largest amount on record. New homes sales dropped by 11.5 percent in August to a seasonally adjusted annual sales rate of 460,000 units, the slowest sales pace since January 1991.

General Electric Co. lowered its forecast for third-quarter and full-year earnings, citing unprecedented weakness and volatility in the financial services markets. The stock, which had declined in the early going, finished up $1.09, or 4.4 percent, to $25.68 alongside the gains in the broader market.