Stocks surged Thursday, extending the biggest monthly rally for the S&P 500 since 1974, and the euro strengthened as European leaders agreed to expand a bailout fund to stem the region’s debt crisis.
The Dow Jones industrial average closed up 339.51, or 2.86%, at 12,208.55; the S&P 500 rose 42.59, or 3.43%, to end at 1,284.59; and the Nasdaq composite was up 87.96, or 3.32%, to close at 2,738.63. All numbers are preliminary.
Benchmark gauges in France, Italy and Germany rose more than 5% as German and emerging-markets stocks extended gains from this year’s lows to more than 20%.
Equities, commodities and the euro rallied as the eurozone’s rescue fund was boosted to €1 trillion ($1.4 trillion) and investors agreed to a voluntary write-down of 50% on Greek debt.
“Europe has done enough for the time being,” Russ Koesterich, global chief investment strategist for BlackRock’s iShares unit, said in a telephone interview. “It will remove near-term pressure.”
The S&P 500 traded above its highest closing level in almost three months and has rebounded more than 17% since Oct. 3, when it closed at the lowest level since September 2010. The advance has been fueled by better-than-estimated corporate earnings and economic data and growing confidence that European leaders would make progress in combating the sovereign debt crisis.
Stocks also rose on news that the U.S. economy grew at a 2.5% annual rate in the third quarter, according to figures from the Commerce Department. Household purchases, the biggest part of the economy, increased at a more-than-projected 2.4%.