New York - US stocks reached a two-month high Friday, the first day of trading in 2009, buoyed by news that General Motors had received its first money lifeline from the US government.

With Wall Street's three major indices adding 2.94 to 3.5 per cent, the news took some of the sting out of the end-of-2008 headlines on Wednesday, which dismally blared the market's worst annual drop since the Great Depression. The Dow Jones Industrial Average alone shed 34 per cent over the year.

GM, the largest US automaker, rallied 14 per cent Friday after the US government moved during the New Year's holiday to free up more money for auto loans and to start the emergency infusion of billions of dollars directly into the industry to keep it afloat.

While Chrysler LLC was still waiting for its money on Friday, General Motors has received 4 billion dollars of the 13.4-billion- dollar lifeline promised by US George W Bush late in December, Bloomberg financial news service reported.

Meanwhile, the US Treasury this week released guidelines for how it could help other parts of the auto industry, the Detroit Free Press reported.

On Monday, the US Treasury Department started moving to free up auto loans by committing 6 billion dollars to supporting GMAC LLC, the financing arm of General Motors Corp.

Energy stocks also rose on per-barrel oil price increases.

The blue-chip Dow Jones Industrial Average gained 258.30 points, or 2.94 per cent, to 9,034.69. The broader Standard & Poor's 500 Index jumped 28.55 points, or 3.16 per cent, to 931.80. The technology heavy Nasdaq Composite Index increased 55.18 points, or 3.5 per cent, to 1,632.21.

European markets also showed hefty investor interest, with London's FTSE 100 up 2.88 per cent, France's CAC 40 up 4.09 per cent and Germany's DAX up 3.39 per cent.

The US currency gained against the euro to 71.83 euro cents from 71.63 euro cents on Wednesday. The dollar also increased against the Japanese currency to 91.84 yen from 90.67 yen. (dpa)