Stocks surge as deal struck on Greece

The Dow Jones industrial average surged nearly 340 points Thursday after European leaders agreed on a deal to slash Greece's debt load and prevent the crisis there from engulfing larger countries like Italy. The Standard & Poor's 500 index is close to having its best month since 1974.

Commodities and Treasury yields soared as investors took on more risk. The euro rose sharply against the dollar.

Europe's sweeping agreement, reached after an all-night summit meeting, is aimed at preventing the Greek government's inability to pay its debt from escalating into another financial crisis like the one that happened in September 2008 after the collapse of Lehman Brothers.

Banks agreed to take 50 percent losses on the Greek bonds they hold. Europe will also strengthen a financial rescue fund to protect the region's banks and other struggling European countries such as Italy and Portugal.

"This seems to set aside the worries that there would be a massive contagion over there that would have brought everything down with it," said Mark Lamkin, head of Lamkin Wealth Management.

Stronger U.S. economic growth and corporate earnings also drove markets higher. The government reported Thursday that the economy grew at a 2.5 percent annual rate from July through September on stronger consumer spending and business investment. That was nearly double the 1.3 percent growth in the previous quarter.

The Dow Jones industrial average soared 339.51 points, or 2.86 percent, to 12,208.55. The S&P 500 rose 42.59, or 3.43 percent, to 1,284.59. The index is up 13.5 percent for the month, its best performance since a 16.3 percent gain in October 1974. The Nasdaq index rose 87.96, or 3.32 percent to 2,738.63.