NEW YORK, N.Y. - Stocks rose sharply in the U.S. and Europe Monday after French and German leaders promised to strengthen European banks. The Dow Jones industrial average jumped 275 points, led by Bank of America. The euro rose against the dollar.
German Chancellor Angela Merkel and French President Nicolas Sarkozy said they would finalize a "comprehensive response" to the debt crisis by the end of the month, including a plan to make sure that banks have adequate capital.
"The more we can put our arms around the problem with a little more detail, the better, and time frames usually help," said Michael Sansoterra, a portfolio manager at Silvant Capital Management in Atlanta.
The Dow rose 275 points, or 2.5 per cent, to 11,379 at 12:15 a.m. Bank of America Corp. rose .9 per cent, the most of the 30 companies that make up the index. JPMorgan Chase & Co. rose 4.9 per cent.
The Dow soared 468 points from Tuesday through Thursday last week after Europe's central bank moved to shore up the region's lenders. It dipped 20 points Friday and is still down 1.7 per cent for the year.
The Standard & Poor's 500 index rose 33, or 2.9 per cent, to 1,188. The Nasdaq composite index rose 76, or 3.1 per cent, to 2,555.
European stock markets rose and the euro strengthened against the dollar on the latest indication that European leaders were making progress on containing the region's debt crisis. Germany's DAX rose 3 per cent and France's CAC-40 rose 2 per cent.
Investors were also relieved that troubled Franco-Belgian bank Dexia would be partially nationalized. Dexia needed rescue because owns large amounts of government bonds of indebted countries like Greece and Italy.
European banks have become more reluctant to lend to each other, putting overextended banks like Dexia in danger. That prompted the European Central Bank last week to offer unlimited one-year loans to the banks through 2013 to help give them access to credit.
Investors have been worried that a default by Greece could cause the value of Greek bonds held by those banks to plunge, hurting their balance sheets. U.S. banks could also be affected if Greece goes through a messy default, since they own Greek bonds and also have close ties to European banks.
Apple Inc. rose 4 per cent to $384.71 after reporting that first-day orders for its new iPhone topped 1 million. The phone goes on sale Friday.
Netflix Inc. rose 3.7 per cent after the company abandoned its widely panned decision to separate its DVD-by-mail and Internet streaming services. Subscribers will still be able to use both services under one account and one password.
Yahoo Inc. jumped 2.6 per cent to $15.87 following reports that founder Jerry Yang may organize a buyout of the company with private equity investors.
Oil and gas driller Nabors Industries Ltd. jumped 11 per cent, the most of any company in the S&P, after oil rose above $85 a barrel. It hit a 12-month low of $75 a barrel last week.
Alcoa Inc. will become the first major U.S. company to report third-quarter results after the closing bell Tuesday. The aluminum maker's stock was up 3.5 per cent to $10.05.
Bond trading is closed for the Columbus Day holiday.