American stocks staged their biggest rally this month after Standard & Poor’s kept AAA debt ratings for the nation’s largest bond insurers, easing concern credit losses will extend the worst earnings slump since 2001.

MBIA Inc. and Ambac Financial Group Inc., which rely on their top credit scores to guarantee $1.2 trillion in bonds, led gains in the S&P 500 Index, and helped banks and insurers rebound from earlier losses. Exxon Mobil Corp. climbed the most in a month after natural gas prices advanced to a two-year high. Genentech Inc. posted its steepest gain in three years on federal approval to market Avastin for breast cancer.

The S&P 500 advanced 18.69 points, or 1.4%, to 1,371.8. The Dow Jones Industrial Average rose 189.2, or 1.5%, to 12,570.22. The Nasdaq Composite Index added 24.13, or 1.1%, to 2,327.48. Almost six stocks climbed for every one that fell on the New York Stock Exchange.

“People are breathing a sigh of relief and jumping back in again,” a manager of financial services stocks at Alpine Woods Capital Investors, which oversees $12 billion in Purchase, N.Y., Peter Kovalski, said. “All financials that would’ve been vulnerable to a meltdown in credit markets rebounded on this news.”

Financial companies in the S&P 500 lost money as a group in the fourth quarter and are projected to post profit declines through the first half of 2008, according to estimates compiled by Bloomberg. Their shares lost 6.4% this year, partly due to concern that insurance would lapse on bonds guaranteed by Ambac and MBIA.

MBIA climbed $2.40 to $14.58. Ambac rose $1.70 to $12.41. Financial shares in the S&P 500 gained 1.2% after earlier falling as much as 1.8%. MBIA is no longer under review for a downgrade by Standard & Poor’s, indicating the bond insurer is a step further away from losing its AAA insurance credit rating. Ambac, which ranks second to MBIA among bond insurers, is still being reviewed for a possible downgrade, S&P said.