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NEW YORK - Wall Street extended a huge rally Friday as investors stormed back into the market, relieved that the government plans to rescue banks from billions of dollars in bad debt. The Dow Jones industrials rose more than 400 points, giving them a massive gain of more than 800 points over two days.

A new ban on short selling, or placing bets that a stock will fall, was likely adding to the market’s gains. And Friday was a quarterly “quadruple witching” day, which marks the simultaneous expiration of options contracts, an event that often adds to volatility.

Treasury Secretary Henry Paulson will be speaking at 10 a.m. Eastern time about the rescue plan, which is expected to help alleviate the year-old credit crisis by removing soured real estate debt from financial institutions’ books.

If a plan is put in place to help the banking industry, it could help alleviate the uncertainty that has been sending the markets into tumult over the past week. Lending has grinded to a virtual standstill in the wake of the bankruptcy of Lehman Brothers Holdings Inc. and the bailout of teetering insurer American International Group Inc.

The Federal Reserve said Friday it will expand its emergency lending and let commercial banks finance purchases of asset-backed paper from money market funds. The Fed will also buy short-term debt obligations issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks.

And to help calm investors’ anxieties, the Treasury Department has decided to use a Depression-era fund to provide guarantees for U.S. money market mutual funds. Money market mutual funds are typically considered safe, but many investors have been fleeing them due to worries about the funds’ exposure to the embattled financial industry.

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Investors looking for a sign that big companies are still spending on software found a measure of relief after Oracle reported fiscal first-quarter earnings that beat expectations.

Wall Street took the company’s positive tone at face value, sending up shares $1.10, or 5.9 percent, to $19.85 in after-hours trading. But the company’s weakening guidance for new software license sales may tell a different story.

After the closing bell Thursday, Oracle Corp. said its fiscal first-quarter profit jumped 28 percent as sales stayed steady despite turmoil in the U.S. economy.

The business software maker’s net income for the three months ended Aug. 31 rose to $1.08 billion, or 21 cents per share, from $840 million, 16 cents per share, a year ago.

Excluding expenses for employee stock options and acquisitions, Oracle posted earnings of 29 cents per share, two cents more than analysts had expected, according to a Thomson Reuters poll.

Revenue increased 18 percent to $5.33 billion.

New software license sales, a measure closely watched by investors, increased 14 percent, within the 10 percent to 20 percent range Oracle had predicted. The Redwood Shores, Calif.-based company said changes in foreign exchange rates accounted for 4 percentage points of the increase, less than the 5 percentage points it had originally expected.

Revenue from software license updates and product support increased 23 percent to $2.94 billion.

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LONDON (Reuters) - A schoolboy, said by prosecutors to be the youngest Briton to be convicted of a terrorism offence, was jailed for two years on Friday for his part in what prosecutors called a worldwide plot to target non-Muslims.

Hammaad Munshi, 18, was found guilty last month of being part of a cell that spread extremist propaganda and provided practical guides on how to make poisons and suicide vests.

Detectives said Munshi, an IT expert who was just 16 when he was arrested at his home in Dewsbury, northern England, as he returned from school, was dedicated to al Qaeda’s cause.

He used the Internet to circulate material including technical documents on how to make napalm and homemade explosives, and discussed how to smuggle a sword through airport security.

Al Qaeda propaganda promoting “murder and destruction” was stored on his computer and notes on martyrdom were hidden under his bed, London’s Old Bailey court heard.

The teenager, who was convicted of making a record of information likely to be useful in terrorism, was sentenced on Friday to two years in a young offenders’ institution.

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