Stocks surged Monday as investors cheered France and Germany’s pledge to resolve the eurozone’s banking and sovereign debt troubles.
The Dow Jones Industrial Average soared 330.06 points, or 2.97 percent, to 11,433.18, closing at session highs. All 30 Dow components rose, with bank stocks leading the charge higher. Bank of America climbed 6.4 percent and J.P. Morgan Chase advanced 5.2 percent. The gains came after the blue-chip index managed a 190-point rally last week.
The Standard & Poor’s 500 index gained 39.43 points, or 3.41 percent, to 1,194.89. Each of the index’s 10 sectors closed in positive territory, with financial, energy and material stocks notching the biggest gains. The technology-oriented Nasdaq Composite surged 86.70 points, or 3.5 percent, to 2,566.05.
Stocks have surged since tumbling into bear-market territory last week, broadly considered a decline of 20 percent from a recent peak. The S&P 500 is up 11 percent since hitting a nadir on an intraday basis last Tuesday.
Monday’s action followed gains in European markets. The Stoxx Europe 600 tacked on 1.7 percent. A plan to address problems at Franco-Belgian bank Dexia, which includes the nationalization of the Belgian unit, also bolstered sentiment.
French President Nicolas Sarkozy and German Chancellor Angela Merkel said they were determined to have a “comprehensive package” by the end of October. Europe should have its problems resolved before the summit of the Group of 20 leading economies in France, on Nov. 3-4, Sarkozy said.
Still, the package outlined by the two leaders was sparse, suggesting that Europe’s two top economies continue to dispute the plan’s specific elements.
“I’d be leery of this move,” said Charlie Smith, chief investment officer at Pittsburgh-based Fort Pitt Capital Group. “I don’t think there’s a lot of strong underpinnings to this rally.”
The third-quarter earnings season unofficially kicks off after Tuesday’s closing bell, when Dow component Alcoa discloses results. The aluminum company’s stock rose 3.9 percent. J.P. Morgan Chase and Google are among other companies due to report quarterly results this week.
US bond markets were closed Monday in observance of Columbus Day. The economic calendar was also bare.
