The surge in equities ended a seven-day losing streak for the Standard Poor’s 500-stock index, pushing it nearly 3 percent higher. It was a welcome change of direction from last week, when Wall Street lost more than 4 percent as markets reacted to rising borrowing costs for European governments and the failure by a Congressional committee in Washington to reach an accord on ways to cut the budget deficit.
On Monday, traders reacted to the news that Germany and France have been discussing a deal to hasten European budget and financial coordination. Analysts said a deal that did not require renegotiating European Union treaties could reassure markets and bring skeptics on board to support the euro.
“We are seeing slightly better news out of Europe,” said Kate Warne, an investment strategist for Edward Jones. With last week’s oversold conditions, she added, “not surprisingly, there are a lot of attractive opportunities.”
The Dow Jones industrial average rose 2.59 percent, or 291.23 points, to 11,523.01. The S. P. 500 jumped 2.92 percent, or 33.88 points, to 1,192.55, and the Nasdaq composite index was up 3.52 percent, or 85.83 points, to 2,527.34.
There were reasons to be guarded about the significance of one day of gains, however. Monday’s surge had not pushed any of the major indexes into positive territory for the month or year.
It could also be another sign of rising market volatility. The S. P. 500, for example, has closed up at least 4 percent in one day eight times since the beginning of 2009, as the financial crisis set in, while it has fallen by 4 percent or more 10 times in that period.
Howard Silverblatt, senior index analyst for Standard Poor’s, said a high proportion of the index’s big swings had, in fact, occurred just since 2009: of 164 times the index had moved by at least 4 percent since 1962, 26 had been in the last three years.
In Europe, the Euro Stoxx 50 index, a barometer of euro zone blue chips, rose 5.73 percent. The CAC 40 in Paris was up 5.46 percent, and the DAX, the German index, rose 4.6 percent. The FTSE 100 index in London gained 2.87 percent. The euro rose to $1.3308, from $1.3239 late Friday in New York.
In the bond market, the 10-year note fell 1/32, to 100 9/32, and the yield remained at 1.97. The comparable German bond rose 4 basis points, to yield 2.29 percent.
Bonds of countries that have been seen as more risky rose in price. Italian 10-year bonds traded to yield 7.191 percent, down four basis points. Spanish 10-year bonds were down 13 basis points at 6.50 percent.
“Talk that European countries were discussing bilateral treaties to strengthen fiscal ties across the current monetary union seems to be easing tensions somewhat this morning, and driving a sizable sell-off in the U.S. rates markets,” Guy LeBas, the chief fixed-income strategist for Janney Montgomery Scott, wrote in a research note.
Investors seemed to shrug off dire warnings from the Organization for Economic Cooperation and Development and Moody’s Investors Service, both of which warned that the euro zone problems were well on their way to becoming serious issues for noneuro countries.
Markets also took a measure of optimism from the National Retail Federation, which said on Sunday that spending in the United States during the Thanksgiving weekend surged 9.1 percent over last year — the biggest increase since 2006 — to an average of almost $400 per shopper. On Wall Street, consumer stocks were up about 3 percent, while energy stocks were up more than 3.5 percent as oil prices rose.
United States Steel rose 8.49 percent, or $1.89, to $24.16, as the materials sector over all rose 3.6 percent.
Marathon Oil was up 5.35 percent at $25.98, and consumer shares were helped by Netflix, which jumped 9.54 percent, to $69.95.
Commercial Metals Company pushed 23.76 percent higher, to $14.17, after Carl C. Icahn offered to acquire the company, a recycler based in Irving, Tex., for $15 a share.
David Jolly contributed reporting.
This article has been revised to reflect the following correction:
Correction: November 28, 2011
An earlier version of this article misstated the recent yield for the United States 10-year Treasury bond.
Article source: http://feeds.nytimes.com/click.phdo?i=1afb88d99f98d8acc9d785fda0194df9
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