Stocks rise 3rd day on optimism over Europe’s debt crisis

Associated Press

NEW YORK

Stocks rose broadly Tuesday on hopes that Europe was moving closer to resolving its debt crisis. The Dow Jones industrial average closed up 146 points as industrial and materials companies led the market higher.

Germany’s chancellor Angela Merkel said her country would do whatever it could to help Greece regain investors’ confidence. Greece’s finance minister also said that country would receive the next round of bailout loans in time to avoid a default. Greece was at risk of running out of money by mid-October if it did not receive the funds.

“Europeans are finally starting to understand that they need to act with some force to get ahead of the European debt crisis,” said John Briggs, a fixed-income strategist at RBS.

The Dow rose 146.83 points, or 1.3 percent, to close at 11,190.69. It had been up as many as 325 points earlier. The Dow has added 419 points over the last two days, making up more than half of its 737-point plunge last week.

European markets closed sharply higher. Germany’s DAX rose 5.3 percent, France’s CAC-40 5.7 percent. Britain’s FTSE 100 rose 4 percent.

The encouraging signs from Europe also sent commodities prices higher. Investors fear that a blowup in Europe’s debt crisis could drag down economic growth across the globe. That would reduce demand for raw materials such as crude oil and copper.

Oil soared 5.3 percent, copper 4.8 percent. That helped the stocks of energy producers and mining companies. Freeport-McMoRan Copper & Gold Inc. rose 3.1 percent and Exxon Mobil Corp. rose 1.7 percent. Gold rose 3.6 percent, its first gain in a week.