Stocks surge on hope in Greek debt crisis

Stocks surged Tuesday on hopes that European leaders are moving closer to a plan to contain that region's debt crisis.

At one point, the Dow Jones industrial average was up nearly 300 points, its biggest gain since late August, although the rally lost steam toward the closing bell.

Germany's chancellor Angela Merkel said her country would do whatever it could to help Greece regain investors' confidence. Greece's finance minister also said that country would receive the next round of bailout loans in time to avoid a default. Greece was at risk of running out of money by mid-October if it did not receive the funds.

"Europeans are finally starting to understand that they need to act with some force to get ahead of the European debt crisis," said John Briggs, a fixed-income strategist at RBS.

The Dow closed up 146.8 points, or 1.3 percent, at 11,190.7. The gains were broad. Every one of the 30 stocks in the Dow average rose.

The Standard & Poor's 500 index closed up 12.4 points, or 1.1 percent, to 1,175.4. Materials and energy shares led the S&P higher. Only 19 of the 500 stocks in the S&P 500 fell. Sears Holdings Corp. rose 12 percent, the most of any stock in the index.

The Nasdaq composite rose 30.1, or 1.2 percent, to 2,546.8.

Earlier, the European markets closed sharply higher. Germany's DAX rose 5.3 percent, France's CAC-40 5.7 percent. Britain's FTSE 100 rose 4 percent.

The encouraging signs from Europe also sent commodities prices higher. Oil soared 4.3 percent at $83.66 a barrel. Gold prices also surged 3.9 percent, after having plunged 9.6 percent last week. Price for the day was $1,654.70 an ounce.

Among the reports out Tuesday was the consumers' confidence survey that showed Americans are still not quite in a spending mood. The survey numbers remained weak in September after dropping to a post-recession low in August.

Many consumers, the survey found, were spooked last month over a downgrade of U.S. long-term debt, after some in Congress threatened to default on the U.S. debt during the protracted debate over the debt ceiling.

Economists watch the confidence index closely because consumer spending accounts for about 70 percent of U.S. economic activity. The Conference Board bases its index on results of a random survey of consumers at 5,000 households from Sept. 1 through Sept. 15.

One gauge of the index, which measures how shoppers feel now about the economy, declined to 32.5 from 34.3 in August. The other gauge, which measures shoppers' outlook over the next six months, edged up to 54.0 from 52.4 in August.