Stocks finished sharply higher Monday after some euro zone optimism helped boost investor confidence and following robust retail sales over the Thanksgiving weekend.
The Dow Jones Industrial Average soared 291.23 points, or 2.59 percent, to close at 11,523.01, led by Alcoa and Caterpillar .
The S&P 500 jumped 33.88 points, or 2.92 percent, to end at 1,192.55. The Nasdaq surged 85.83 points, or 3.52 percent, to finish at 2,527.34. Both indexes reversed seven days of straight declines.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, finished near 32.
All 10 S&P sectors closed in positive territory, led by materials and energy.
Trading was still light with just 6.2 billion shares changing hands during the day, significantly below the daily average of 8 billion shares.
“We’ve had a good bounce,” said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research. “[But] with the continuing EU problems…this seems to be a good one-day oversold bounce.”
“The S&P 500 found some trouble around the 1,200 area so we have some logical area of potential resistance,” Detrick added.
European stocks also jumped, led by financials, as officials said Germany and France were exploring radical actionsof securing deeper and more rapid fiscal integration among euro zone countries.
Italy's prime minister faces a testing week as he seeks to shore up the country's strained public finances, with an IMF mission expected in Rome and market pressure building to a point where outside help may be needed to stem a full-scale debt emergency.
An IMF spokesperson denied that the institution was in talkswith Italian authorities for a loan of up to 600 billion euros ($798 billion) after Italian daily newspaper La Stampa reported that the Fund was considering such a plan.