NEW YORK: US stocks rallied Tuesday after a British newspaper reported that France and Germany were ready to sharply boost the eurozone's rescue fund in a bid to address the public debt crisis.
The Dow Jones Industrial Average surged 180.05 points (1.58 percent) to finish at 11,577.05.
The tech-heavy Nasdaq Composite rose 42.51 points (1.63 percent) to 2,657.43, while the S&P 500, a broader measure of the markets, advanced 24.52 points (2.04 percent) to 1,225.38.
Citing unnamed European Union diplomats, The Guardian reported that the leaders of France and Germany, the eurozone's biggest economies, have agreed to boost the rescue fund to two trillion euros ($2.7 trillion).
Stocks, which had opened lower after Monday's sell-off then climbed in the afternoon, jumped more than one percentage point in the final hour of trade after The Guardian report came out.
Banks also pulled the markets up with positive earnings reports, despite what analysts said were accounting tactics which masked weaknesses and evidence that banks are still suffering large levels of default on loans to consumers and home buyers.
Bank of America added 10.1 percent; JPMorgan Chase 5.9 percent; Wells Fargo 5.9 percent; and Citigroup 7.0 percent.
"We had a better than expected report from one of the major US banks, that put confidence to the upside," said Bart Melek of TD Securities, referring to Bank of America's quarterly earnings report.
Goldman Sachs leaped 5.5 percent to $102.25. The Wall Street investment giant posted a bigger-than-expected loss for the third quarter amid global market turmoil, but investors appeared to believe it will weather the storm.
IBM shares sank 4.1 percent to $178.90 after its quarterly net earnings beat forecasts but showed weaker-than-anticipated revenues.
Shares of popular shoemaker Crocs were dumped after its warning late Monday that profits would not hit forecasts; the shares ended Tuesday down 39.4 percent.
Bond prices were mixed. The yield on the 10-year Treasury fell to 2.15 percent from 2.16 percent late Monday, while that on the 30-year Treasury rose to 3.16 percent from 3.14 percent.
Bond yields and prices move in opposite directions.
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