Press Association
Monday 15th March 2010
The Dow Jones industrial average jumped back above 10,000 on hope that the European Union will help Greece manage its growing debt burden.
The Dow rose 150.25, or 1.5%, to 10,058.64, its steepest percentage gain since November 9. The broader Standard & Poor's 500 index rose 13.78, or 1.3%, to 1,070.52, while the Nasdaq composite index rose 24.82, or 1.2%, to 2,150.87.
Global markets bounced back on reports that European Central Bank President Jean-Claude Trichet is changing his travel schedule to attend a meeting of EU officials on Thursday and that plans are being developed to rescue Greece. The reports are raising hopes that policymakers will take bigger steps to contain troubles in Greece. The county is struggling with big budget gaps and is seeing demand fall for its debt.
Though Greece's economy is small, investors are concerned that troubles there will spill into other countries. World stock markets have been tumbling in recent weeks on concerns that debt problems would spread. Investors are also concerned by budget gaps in Ireland, Portugal, Spain and the uncertainty has undermined Europe's common currency, the euro.
The European debt problems are the latest obstacle for investors who have put the market's 10-month rally on hold. Stocks began retreating in mid-January after China said it would try to control its economy to avoid speculative bubbles. Things got worse when President Barack Obama announced plans to curb trading by large financial institutions.
On Tuesday, Greece took its latest steps to calm markets, pledging to increase retirement ages, raise fuel taxes and accelerate reforms. However a strike over the government's new austerity measures is still expected to proceed on Wednesday.
"There's some euphoria that maybe it's not going to be blowing up," said Erik Davidson, managing director of investments for Wells Fargo Private Bank in Carmel, California, referring to easing fears over Greece.
The Dow also got a boost from Morgan Stanley's upgrade to shares of Caterpillar Inc. It was Morgan's first upbeat take on the stock in three years. A cautious forecast from the equipment maker hurt stocks late last month.
