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NEW YORK: US stocks snapped back on Tuesday from heavy losses a day earlier as financial market tensions eased along with fears over the eurozone debt crisis.
The blue-chip Dow Jones Industrial Average jumped 150.25 points (1.52 percent) to end at 10,058.64, a day after closing below the key 10,000 level for the first time since November 4.
The Nasdaq composite climbed 24.82 points (1.17 percent) to 2,150.87 and the broad-market Standard & Poor's 500 index gained 13.78 points (1.30 percent) to 1,070.52.
The market roared higher from the open as investors believed the European Union, based on reports, will move to tackle the eurozone debt problems centring around Greece.
Stocks "are erasing some of the red ink that has accrued to start the year as sovereign debt concerns in the Eurozone are being eased by speculation European officials may be nearing a plan to help Greece attempt to get its deficit issues under control," analysts at Charles Schwab & Co said in a note.
Germany, the eurozone's biggest economy, is preparing an aid plan to help struggling Greece resolve its massive debt problems, the Financial Times Deutschland reported.
In its Wednesday edition, the newspaper said German Finance Minister Wolfgang Schaeuble was working on both a bilateral basis and at the European level on putting together a package to help Athens.
The debt and deficit problems of Greece, Spain and Portugal - all of which belong to the 16-nation eurozone - are also expected to be high on the agenda at a key EU meeting on Thursday.
News that European Central Bank president Jean-Claude Trichet was leaving a central bankers' meeting in Sydney early to attend the European Union summit in Brussels bolstered belief that a deal was in the works.
Some analysts remain skeptical.
"We're not sure why there would be a true sense of relief over such headlines," said Patrick O'Hare of Briefing.com
"An aid package could help stem some of the speculative interest in credit default swaps that is unnerving global markets, yet it still doesn't correct the crux of the problem, which is a government that spends a lot more than it collects in taxes," he said.
The benchmark gauge for European bank debt risk climbed to a seven-month high on Tuesday amid budget deficit concerns in Greece, Portugal and Spain which some feared also could have a knock-on effect to other nations and destabilise the global economic recovery.
"We may see near-term relief rallies, which would be very welcome, but do not expect a 'V' bottom in the US stock market until European debt concerns subside," said Frederic Dickson, chief market strategist for DA Davidson & Co.
Among gaining stocks was US beverage giant Coca Cola, rising 2.58 percent to 54.01 dollars as its net profit jumped 55 percent in the fourth quarter, lifted by sales volume growth in China, India and other key emerging markets.
Electronic Arts plunged 8.75 percent to 15.96 dollars after the video game giant offered a worse-than-expected outlook for its current quarter and fiscal year.
McDonald's rose 1.03 percent to 63.57 dollars as it reported a jump in global sales in January, topping some analysts' estimates.
American Airlines gained 13.80 percent to 8.33 dollars after Japan Airlines said it will maintain its existing alliance with the US carrier, spurning overtures from rival Delta Air Lines, up 10.13 percent to 12.39 dollars.
The bond market declined slightly. The yield on the 10 year US Treasury bond rose to 3.633 percent from 3.592 percent on Monday and that on the 30 year bond was higher at 4.568 percent from 4.522 percent. Bond prices and yield move in opposite directions. - AFP/de
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