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Thursday, September 15, 2011

US Stocks rally on hopes for Greece (ext.)

NEW YORK (CNNMoney) -- Stocks ended sharply higher Wednesday following a choppy start, after key European leaders calmed jittery investors by insisting that Greece would remain a eurozone member and would achieve its fiscal targets.

The Dow Jones industrial average (INDU) shot up 280 points, or 2.5% before pulling back to end up 141 points, or 1.3%. The gains were broad, with Home Depot (HD, Fortune 500), Walt Disney (DIS, Fortune 500) and General Electric (GE, Fortune 500) leading the blue chips.

The S&P 500 (SPX) added 16 points, or 1.4%, and the Nasdaq composite (COMP) rose 40 points, or 1.6%.

Investors have been parsing through the good, the bad and the downright confusing news about Europe's debt crisis throughout the day, which made for a choppy trading session.

Earlier, headlines suggesting that the Austrian parliament committee "rejected" the expansion of Europe's stability fund spooked investors and sparked a sharp sell-off.

But it turned out the headlines weren't exactly right.

A spokesperson from the Austrian finance ministry told CNNMoney that the Sept. 21 parliament vote to upgrade the stability fund will be delayed to late September or early October, due to a procedural hiccup. But he reassured that parliament has the simple majority needed to pass the measure.

"The market survived a false alarm out of Europe," said Scott Marcouiller, chief technical market strategist at Wells Fargo Advisors. "Today's events demonstrate how prone the market is to headline risk."

Investors also grappled with news that Moody's downgraded French banks Credit Agricole and Societe Generale. While the news was disappointing (though expected for some time), the downgrade wasn't as bad as some had feared.

And investors were further heartened by talks coming out of Europe that the European Commission was close to unveiling a proposal for a new common eurozone bond.

The idea of a Eurobond has been talked about lately, as a possible solution to ease the borrowing costs for the weaker members of the 17 euro area nations. But it's faced some opposition from more credit-worthy nations, which would face higher borrowing costs.

The dollar slipped against the euro and the Japanese yen, but rose versus the British pound.

Oil for October delivery slipped $1.30 to settle $88.91 a barrel.

Gold futures for December fell $3.60 to settle at $1,826.50 an ounce.

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