Shortly after trading started in New York, the Standard Poor’s 500-stock index rose 0.8 percent, while the Dow Jones industrial average climbed 1.1 percent. The Nasdaq composite index added 0.2 percent.
The benchmark Euro Stoxx 50 index rallied 2.1 percent in afternoon trading, rebounding from an early loss. The DAX climbed 2.2 percent in Frankfurt.
News reports from a conference at the International Monetary Fund in Washington over the weekend suggested that the German and French authorities have begun a major strategy to prevent the crisis escalating, culminating in a possible announcement at the next Group of 20 leaders’ summit meeting set for Nov. 4 in Cannes, France.
The plan was said to include bank recapitalizations similar to the United States Treasury Department’s Troubled Asset Relief Program, which started injecting capital into banks in 2008. News reports also suggested that the European Central Bank could lend extra funds to the European Financial Stability Fund, the main bailout mechanism in Europe.
There was no official comment, although Wolfgang Schäuble, Germany’s finance minister, said during the weekend that policy makers could make the financial stability fund more “efficient.” And he raised the prospect of bringing in a permanent financial support mechanism before 2013, the current target date.
Olli Rehn, the European Union’s monetary affairs commissioner, said that there was “increasing political will” among European leaders for a new effort to soothe investors.
Jim Reid and Colin Tan, Deutsche Bank analysts, said in a research note Monday: “The hope in Europe is that things are getting potentially so bad that the chances of seeing something much more substantial from the authorities over the next few weeks have surely increased.”
“If not,” the note continued, “then we will really have to think about a financial disaster in the Continent.”
Also supporting stocks in Europe on Monday, a European Central Bank governing council member, Ewald Nowotny, was quoted Monday by the news agency Market News International as saying that an interest rate cut by the bank could not be excluded.
Separately, a report showed that German business confidence in September had fallen less than economists had forecast. The Ifo Institute in Munich said its business climate index dropped for a third straight month to 107.5 points from 108.7 in August. Economists had forecast a decline to 106.5 points, according to Bloomberg News.
In the Asia-Pacific region, stocks declined, compounding the sharp falls they had suffered during the previous week.
In Japan, the Nikkei 225 index dropped 2.2 percent, ending at 8,374.13 points. The index has fallen nearly 500 points since Sept. 16 and is now at its lowest close since April 2009.
The Kospi in South Korea ended down 2.6 percent and the Taiex in Taiwan declined 2.4 percent on Monday. The Hang Seng was 1.5 percent lower.
The markets have for months been shrugging off the fact that most Asian economies — with the notable exception of Japan — are still poised to grow solidly, especially when compared to those of the United States and Europe, and have little direct exposure to the sovereign debt woes of Greece and other euro zone nations.
Many foreign investors have instead stayed on the sidelines or pulled funds into assets deemed safer, like Treasury bonds from the United States and currencies like the Swiss franc and Japanese yen.
But investor jitters have hit gold, which usually is considered a haven in times of uncertainty, and the precious metal fell to around $1,560 an ounce on Monday.
In London, the euro was higher against the dollar on Monday, trading at $1.3508.
Matthew Saltmarsh reported from London. Bettina Wassener contributed reporting from Hong Kong.
Article source: http://feeds.nytimes.com/click.phdo?i=13daf7f5743a52256077259190395e02
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