Stocks soar on European pledge to help banks

Associated Press

NEW YORK

Just last week, a bear market seemed inevitable.

Since then, stocks have surged four out of the past five days, bringing the S&P 500 index up 8.7 percent.

The latest jump came Monday after the leaders of France and Germany pledged to come up with a far-reaching solution to the region’s debt crisis by the end of the month.

The Dow Jones industrial average soared 330 points, its biggest one-day gain since Aug. 11.

It has gained 7.3 percent over the past five days.

Bank of America Corp. jumped 6.4 percent, the most of the 30 stocks in the Dow.

Sharp turnarounds in the market have become increasingly common.

Starting in early August, the market entered a phase of extreme volatility as Europe’s debt crisis intensified and fears of another U.S. recession emerged.

Last Tuesday, the S&P 500 traded 20 percent below its recent peak in April. Had it closed at or below that level, it would have met the definition of a bear market.

Instead, the S&P began a rally that continued through Monday.

The gains were extraordinarily broad; only 5 stocks in the S&P 500 index fell, and 10 stocks rose for every one that fell on the New York Stock Exchange.

As in many recent days, a good part of the increase came at the final minutes of trading.

The Dow rose 100 points in the last half-hour.

Analysts said the sudden moves aren’t likely to dissipate any time soon.