Stocks rally on hope in European crisis

Stocks rallied Monday as investors bet that European finance ministers would take action soon to prop up the region's unstable economies.

European officials pledged over the weekend to take bolder steps to fight Europe's debt problems, which threaten to slow the global economy. The finance ministers offered few specifics about their next steps, but markets are sensitive to every piece of news coming out of the region.

"Perhaps it's just the fact that the talks didn't break down," said Jack Ablin, chief investment officer at Harris Private Bank.

European leaders have not been able to agree on the next steps they will take. German leaders want banks and private institutions that hold Greek bonds to take a bigger loss on those holdings to reduce Greece's debt burden. European officials have also talked about increasing the size of Europe's $595 billion rescue fund by allowing it to take loans from the European Central Bank.

The Dow Jones industrial average closed up 265.6 points, or 2.5 percent, at 11,037.1. The Standard & Poor's 500 ended up 25.7, or 2.3 percent, at 1,162.1. Energy stocks rose the most of the 10 industry groups in the index. The Nasdaq composite closed up 31.3, or 1.3 percent, at 2,514.6.

Berkshire Hathaway's Class B shares rose 7.4 percent, the most of any stock in the S&P 500, after the company announced a plan to repurchase stock for the first since 1965. Buffet is famous for investing with the goal of good long-term returns.

"It should serve to remind investors that investing is a long-term pursuit," said Ablin. "Buffet is as good an indicator for long-term investing as any."