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Finally some good news from the markets. European stocks extended earlier gains as U.S. stocks soared ahead of the expected Federal Reserve rate cut and results from Goldman Sachs and Lehman Brothers. Investors breathed a sigh of relief after two of the four biggest US banks posted better than expected results after the fifth biggest, Bear Stearns, collapsed at the weekend. Although there have been several shocks for the markets recently, Barclays Wealth Equities Strategist Henk Potts says there is a light at the end of the tunnel. SOUNDBITES: Barclays Wealth Equities Strategist, Henk Potts, saying (English): "There clearly are problem in the credit markets which are infringing upon growth prospects as well and we know that central banks have been working very hard to loosen those up a little bit. We know of course that banks are very much 'risk averse' at the moment, that they've made it harder for individuals, for businesses and of course, as we've seen with Bear Stearns recently, financial institutions to borrow money and that's having an effect. But I think a mixture between the aggressive interest rate cuts and liquidity being pumped into credit markets should create an environment that perhaps means that the horizon should seem a little bit brighter than the shock numbers and the shock headlines that we've been seeing recently." European indices were all in the green, and the FTSEurofirst 300 was up 3 and a third percent with recently hammered banking stocks leading the rebound. Oil was over to around 107 per barrel on expectations a Federal Reserve interest rate cut will hit the U.S. dollar and spur investor demand for oil. /// And the happiness seems to be contagious. German Finance Minister Peer Steinbrueck applauded the way the United States had taken action to stop the financial crisis from worsening. SOUNDBITE: German Finance Minister Peer Steinbrueck, saying (German): "I am pleased that measures were taken in the U.S. during the weekend and up until Monday to prevent a worsening of the crisis. Here in Germany we are very strongly reliant on the cooperation between politicians, the Bundesbank (ie German Central Bank), banking associations and banking institutions to reduce the consequences in Germany, which has been very good up until now. That is a question of crisis management." A deal was struck at the weekend for U.S. investment bank J.P. Morgan Chase & Co to take over rival Bear Stearns, while the Federal Reserve Bank offered to extend direct lending to securities firms for the first time since the Great Depression. /// Parallels have been drawn between Bear Stearns and newly nationalised British mortgage lender Northern Rock. The bank plans to cut 2,000 jobs and halve its assets by shrinking its lending book by $101 billion as it seeks to comply with European rules for its state rescue and repay billions of pounds of taxpayers' money. Stefanie McIntyre, Reuters COMPANIES MENTIONED: SYMBOLS: