Mexico peso strengthens, stocks jump on U.S. plan

(Recasts, adds background and share movement)

MEXICO CITY, Oct 14 (Reuters) - Mexico's peso strengthened on Tuesday and stocks soared as a U.S. plan to inject $250 billion into troubled banks helped break the ice in credit markets, emboldening investors to return to emerging markets.

The peso MEX01 firmed 0.83 percent to 12.3 per dollar, marking its second day of gains after being battered for eight straight sessions, while the IPC stock index .MXX jumped 3.76 percent 22,925 points.

The stock rally was spearheaded by Cemex (CMXCPO.MX: Quote, Profile, Research, Stock Buzz), the world's No. 3 cement maker. Its shares surged 18.26 percent to 11.66 pesos.

Cemex shares were hammered last week after it disclosed multimillion dollar losses on derivative positions due to the peso's steep decline.

Shares in America Movil (AMXL.MX: Quote, Profile, Research, Stock Buzz), Latin America's biggest cell phone operator, jumped 4.67 percent to 24.43 pesos.

On Tuesday, the U.S. Treasury Department said it would buy stakes via senior preferred, nonvoting shares in the largest U.S. banks, including Bank of America Corp (BAC.N: Quote, Profile, Research, Stock Buzz), Wells Fargo (WFC.N: Quote, Profile, Research, Stock Buzz), Citigroup (C.N: Quote, Profile, Research, Stock Buzz) and Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz).

The move followed similar measures implemented in Europe and helped ease the cost of lending between banks. The skyrocketing cost of interbank lending had pushed financial markets into panic in recent weeks as investors faced the worst financial crisis in 80 years.

Mexico's peso saw its steepest declines since the depths of the 1995 Tequila Crisis last week as the global credit crisis pushed investors to dump emerging market assets and local companies scrambled to buy dollars on worries the currency could devalue further. (Reporting by Michael O'Boyle, Editing by Walker Simon)