U.S. markets shot up upon hearing the news of Citi’s fresh restart with S&P 500 up 494 points from a 11 and a half year low.

Peter Cardillo, analyst for Avalon Partners is optimistic saying, “Obviously the news out of Citi is welcoming, we might be in for another day of gains today, and if that’s the case, then we’ll have two days of gains.” (CNNMoney Report)

Citigroup’s collapse toppled the firm’s shares to a low of 87%.

From MarketWatch.com

Management also plans to reduce costs across the company by 20% in the near term and will continue to sell off troubled assets.

Citigroup’s layoffs are the latest in a brutal round of job cuts across the financial industry. The cuts have been sparked by unprecedented losses due to bad credit investments, as well as the subsequent precipitous drop in banking and other financial-services business amid the worst economic conditions in 70 years.

Companies like Yahoo, Hewlett-Packard and Sun Microsystems have had similar problems and have dropped several axes to alleviate the recession pains brought about by bad investments and credit.