US stocks gain 2 percent in early trade

NEW YORK: US stocks opened sharply higher Monday as Germany and France showed more commitment to shore up Europe's banks against a Greek default.

At 1400 GMT the Dow Jones Industrial Average was up 230.00 points (2.07 percent) to 11,333.12.

The broader S&P 500 rose 27.48 points (2.38 percent) to 1,182.94, while the tech-heavy Nasdaq Composite gained 59.62 points (2.40 percent) to 2,538.97.

Trade was thinner than usual with much of the country, including federal and local governments, on holiday for Columbus Day.

"US stocks are looking to shrug off Friday's losses in the face of a stabilization plan for the struggling European Union banking sector. After much anticipation and without giving specifics, German Chancellor Angela Merkel and French President Nicolas Sarkozy said they will reveal further details about recapitalizing EU banks over the coming weeks," said Karee Venema of Schaeffer's Investment Research.

The 30 Dow blue chips were all higher just ahead of the third-quarter earnings reporting season.

Caterpillar rose 4.5 percent, Alcoa added 3.6 percent, and the banks were also strong: Bank of America surged 4.2 percent and JPMorgan Chase was up 3.8 percent.

Netflix added 6.4 percent after announcing that it would not split its by-mail and streaming video rental services onto two websites.

Bond prices were mixed. The 10-year Treasury bond yield rose to 2.08 percent from 2.07 percent late Friday, while the 30-year yield was flat at 3.02 percent.

Bond prices and yields move in opposite directions.

Copyright AFP (Agence France-Presse), 2011