NEW YORK — The U.S. stock market posted its best start to a second quarter in 70 years after Lehman Brothers Holdings Inc. said it is raising $4 billion to replenish capital, shoring up confidence that banks can weather further credit losses.

Analysts believe there must be a recovery in banks and brokerages to lead major stock indexes higher. Some of the biggest financial players saw sharp moves yesterday — Citigroup Inc. shot up 11 percent, JPMorgan Chase & Co. rose 9 percent, and Lehman surged 18 percent.

"The market's getting a little more comfortable that the crisis is over," said Henry Herrmann, president and chief executive officer of Waddell & Reed Financial Inc. in Overland Park, Kansas, which manages a portfolio of $65 billion. "It's a rally associated with the presumed elimination of survival risk."

The Standard & Poor's 500 added 47.48 points, or 3.6 percent, to 1,370.18, rebounding from a poor quarterly performance. It was the biggest gain for the first day of the second quarter since a 4.8 percent rally in 1938. The Dow Jones Industrial Average climbed 391.47, or 3.2 percent, to 12,654.36. The Nasdaq Composite gained 83.65, or 3.7 percent, to 2,362.75. Almost 10 stocks advanced for every one that fell on the New York Stock Exchange.

The S&P 500 has risen 7.6 percent from a 19-month low last month on speculation the Federal Reserve's most aggressive reduction of interest rates in two decades will stem credit-market losses and spur bank lending to businesses and consumers.

The benchmark index for U.S. equities had lost 9.9 percent in the first three months of 2008, the steepest quarterly decline in more than five years, amid recession worries.

Asian stocks yesterday rebounded from the worst decline in two weeks and Europe's Dow Jones Stoxx 600 Index advanced 3.3 percent.

Lehman climbed $6.70 to $44.34 after raising $4 billion from a stock sale. The firm raised its offering of convertible preferred shares to 4 million from 3 million, saying demand "significantly" outpaced supply.

"Investors have a difficult time making decisions about the stock market if they don't have confidence in major financial institutions, so there's been a lot of sideline cash," said Richard Cripps, chief market strategist for Stifel Nicolaus, who added, "but that appears to be changing."

Meanwhile, Wall Street got another boost when the Institute for Supply Management said its March index of national manufacturing activity rose to 48.6 — indicating a contraction, but a slower one than in February and tamer than many had predicted. Government data on construction spending in February also came in better than expected.