Stocks logged their biggest gains in over a year Monday after the EU and IMF agreed to a $1 trillion emergency-bailout package to stem the sovereign-debt crisis.
The Dow Jones Industrial Average gained 404.71, or 3.9 percent, to close at 10,785.14. The blue-chip index had pared its gain in the afternoon to about 300-350 before settling near its highs for the day.
It was the biggest point and percentage gain for the Dow since March 2009.
The CBOE volatility index was just shy of 30 at the closing bell.
This comes after last week's nauseating selloff that sent the Dow below 10,400and the VIX above 40.
The 16 nations that use the euro and the IMF agreed to a $1 trillion emergency-rescue package to help prevent the sovereign debt crisis from spreading.
Markets world-wide cheered the move as it was much bigger than expected.
Financials, industrials and consumer discretionary — the stocks that got hammered the most last week — led the pack today.
All 30 Dow components finished higher, including Walmart , which had been down earlier.
Bank of America gained more than 7 percent, while Citigroup added 5.5 percent and JPMorgan gained 3 percent.
Goldman Sachs recovered by the closing bell after being down for much of the day, though the gain was just 0.6 percent. Dozens of Goldman partners are expected to be oustedas the company faces more probes into its trading practices, particularly regarding Greece.
Several large-cap industrials finished up more than 5 percent, including General Electric, the parent of CNBC, Boeing , Caterpillar and Honeywell.
Large-cap techs also posted strong gains, with Apple up nearly 8 percent, and Google and Intel up nearly 6 percent.
Despite all the cheers, some market pros have begun to wonder if the $1 trillion bailout will it be enoughto stem the sovereign debt crisis.
"Germany and other strong European states are chasing a dream," Peter Morici, a professor at the Robert H. Smith school of business, said of the bailout and its promise to hold the EU together.
Commodity prices rose, with oil back above $76a barrel and bond prices fell.
But traders said muted reactions in the euro, which was up about 1 percent, and gold, which held above $1,200 an ounce, offer supporting evidence that the rally won't last.
"I don't necessarily think this pop we've seen today in the market is going to be sustainable," said Dave Lutz, managing director of trading at Stifel Nicolaus. "There's still a fair amount of concern out there."
Lutz said he likes Walmart as a defensive play. He's worried about the possibility of gasoline prices stalling consumer spending.
In options action, investors favored put options on the financial SPDR ETF , suggesting investors don't expect the financial sector to hold today's gains, Interactive Brokers reports.
Homebuilders rallied, with Hovnanian , Beazer and Lennar all up more than 10 percent.
John Paulson, the hedge-fund manager who made billions shorting the real-estate market and was at the center of the Goldman Sachs fraud charges, said in an conference call with investors that he expects home prices to rise between 2 and 5 percentthis year and 8 to 12 percent next year.
McDonald's shares jumped after the fast-food chain reported same-store sales rose 4.9 percent last month.
Shares of Suntech Power surged after the solar-power company projected that first-quarter revenue would top expectations.
Berkshire Hathaway reported a quarterly profit of $2,272 per class A share during the fourth quarter, well above estimates.
Priceline.com jumped nearly 11 percent ahead of its earnings, due out after the bell.
BP skidded after a steel containment dome failed to contain the massive Gulf oil spill.
Dean Foods tumbled after the dairy producer missed its first-quarter earnings target and withdrew its full-year outlook.
Volume was lower than last week's feverish pace but still higher than usual, with about 1.8 billion shares changing hands on the New York Stock Exchange. Advancers outpaced decliners, roughly 19 to 1.
MONDAY: Earnings from Priceline after the bell
TUESDAY: Intel shareholder meeting; wholesale trade; Congressional hearing on market's freefall; Fed's Rosengren, Lockhart speak; 3-year auction; earnings from Toyota
WEDNESDAY: Weekly mortgage applications; trade balance; weekly crude inventories; 10-year auction; Fed's Bullard speaks; earnings from Macy's
THURSDAY: Ford, Google shareholder meetings; weekly jobless claims; import/export prices; Fed's Kocherlakota speaks; 30-year auction; earnings from Kohl's, Nordstrom, Nvidia
FRIDAY: Government's retail-sales report; industrial production; consumer sentiment; business inventories; earnings from JC Penney
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