US stocks climb on back of relief rally

US stocks rose one per cent in a third day of gains yesterday after European leaders displayed new urgency in efforts to contain the Eurozone debt crisis.

German and French leaders called on Greece to implement all financial reforms “strictly and effectively”, a German government spokesman said.

Greece expects policymakers to report that Athens is on track to fulfill its targets and receive the aid it needs to avoid any chance of a debt default, a Greek official said.

Adding to the relief for investors, Italian Prime Minister Silvio Berlusconi won a confidence vote on an austerity plan for the Eurozone’s third-largest economy.

Fears that Europe’s crisis could plunge it into recession and drag down global growth have hammered stocks for weeks. Stocks that are typically well positioned to benefit from economic growth, such as General Electric and other industrial shares, were top gainers.

“What we’re watching is global hedge funds, at least momentarily, throw the risk-trade switch back on, directing funds away from the dollar and into the euro and into global equities,” said Fred Dickson, chief market strategist at DA Davidson & Co.

The Dow Jones industrial average was up 140.88 points, or 1.27 per cent, at 11,246.73. The Standard & Poor’s 500 Index was up 15.81 points, or 1.35 per cent, at 1,188.68. The Nasdaq Composite Index was up 40.40 points, or 1.60 per cent, at 2,572.55.

The S&P 500 is still down 11.6 per cent since 22 July, roughly when the market’s recent slide began.

The actions by European leaders followed an urgent call by US Treasury secretary Timothy Geithner for them to act forcefully to solve Europe’s debt crisis. Geithner said they have the financial and economic capacity to do so.

Conglomerate GE ended 2.5 percent higher at $15.79. Tech stocks also were among top gainers, and the Nasdaq outperformed the other two major indexes for a third day.

Shares of Nvidia Corp jumped 5.2 percent to $15.28, while SanDisk Corp rose 4.2 percent to $42.66.

Dell added 3.3 per cent to $14.86 a day after its board authorized an additional $5bn stock buyback programme.

Volume was 8.5bn shares on the NYSE, Amex and Nasdaq, above last year's average of roughly 7.6bn.

Advancers beat decliners by nearly 11 to four on the NYSE and by about three to one on the Nasdaq.