3:25PM EST: Stocks are surging with the Dow Jones industrials up more than 300 points following a report that the federal government is considering creation of a repository for banks’ bad debt,

CNBC said Treasury Secretary Henry Paulson is considering creation of an entity like the Resolution Trust Corp. that was formed after the failure of savings and loan banks in the 1980s.

The Dow, which had been showing modest moves in the final hour of trading, jumped nearly 330 points to the 10,939 level following the report.

(MY Fox NY)