US stocks jumped on Monday, posting their biggest one-day gains in a year as a nearly $1tr bailout package to help stabilise Europe's debt crisis lifted a broad range of equities including Caterpillar, Bank of America and General Electric.
The Dow Jones Industrial Average rose 404.71 points (3.90%) to 10,785.14, snapping a four-session losing streak. It was the Dow's biggest one-day gain since March 23, 2009. The rise put the Dow back into positive territory for 2010 after it had slipped into the red late last week. The Dow is now up 3.42% for the year.
All the Dow's 30 components ended the session in the black, led by some of its most economically sensitive: Caterpillar, Bank of America and General Electric. Caterpillar jumped $4.59 (7.4%) to $66.69, while Bank of America climbed $1.12 (6.9%) to $17.30, and GE leapt $1.16 (6.9%) to $18.04.
The Nasdaq Composite soared 109.03 (4.81%) to 2,374.67, its biggest point gain since October 28, 2008, and its largest percentage gain since March 2009. The measure also moved back into the black for the year to date, up 4.65% over the period.
The Standard & Poor's 500 index climbed 48.85 (4.40%) to 1,159.73, its biggest one-day jump since March 23, 2009. The gain put the measure up 4.00% for the year to date. All its sectors were in the black on Monday, led by industrials, financials and consumer-discretionary stocks.
The gains came after the European Union agreed to a EUR750bn bailout, comprising EUR440bn of loans from euro-zone governments, EUR60bn from a European Union emergency fund and EUR250bn from the International Monetary Fund. In addition, the European Central Bank will go into the secondary market to buy euro-zone national bonds, and the Federal Reserve, working with other central banks, re-activated swap lines so foreign institutions can get access to loans.
The moves served as a major relief to investors who had been worrying over whether the EU could contain Greece's sovereign-debt issues.