Overseas markets surged early Tuesday as government-backed bank-bailout plans in the United States, Europe and Japan persuaded investors to jump back into stocks.

Shares of Ford Motor Co. (F) and General Motors Corp. (GM) posted gains yesterday (Tuesday) on speculation that consolidation in the U.S. domestic auto industry could be the struggling sector’s saving grace.Over the last three trading sessions, Ford shares are up almost 18%, while GM shares are up over 37% on reports of possible merger talks and asset sales.

Global markets had deep sell-offs yesterday (Tuesday) as short-term credit markets remained tight, with the three-month lending rate for banks hitting a yearly high.

The U.K. government yesterday (Wednesday) announced its own banking bailout package with an $87 billion (50 billion pound) recapitalization plan for the ailing British financial sector.

By relaxing the US financial system’s mark-to-market accounting standards, the government is effectively deactivating the financial “early warning system” that let investors know that a global credit crisis was brewing, says Jennifer Yousfi in Money Morning.

In a bold move to provide stability to the frozen short-term credit markets, the U.S. Federal Reserve yesterday (Tuesday) announced new measures aimed at boosting liquidity and allowing corporations to maintain daily operations. But the U.S. markets were less enthusiastic about the Fed’s new measure. Slight gains in early morning trading quickly reversed course to plunge much lower.

After a day of dueling lawsuits yesterday (Monday), all parties agreed to halt litigation for two days as Citigroup Inc. (C) and Wells Fargo & Co. (WFC) continued to squabble over rights to purchase Wachovia Corp. (WB).

The battle for battered bank Wachovia Corp. (WB) is heating up with Citigroup Inc.’s (C) win of a court order to extend negotiations, while Wells Fargo & Co. (WFC) contends its merger agreement still stands.

After executing a preemptive sale of investment bank Merrill Lynch & Co. Inc. (MER), Chief Executive John A. Thain will remain with Bank of America Corp. (BAC) after the merger, the Charlotte-based bank announced yesterday (Thursday).

Fresh off one of the most-volatile months ever for U.S. stocks, investors can’t be happy that they’re facing another October – the poster child for U.S. stock market crashes. Thanks to the stock market crashes of 1929 and 1987, October has a reputation for being a horrible month for stocks. But once you dig into the data, you find that October’s reputation as the “jinx month” might just be undeserved.