NEW YORK – Stocks rose sharply Tuesday on hopes that European leaders are moving closer to a plan to contain that region’s debt crisis. The Dow Jones industrial average rose more than 225 points.
Germany’s chancellor Angela Merkel said her country would do whatever it could to help Greece regain investors’ confidence. Merkel and Greek Prime Minister George Papandreou are expected to discuss ways to solve the debt crisis later today.
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.
Shortly after 10:15 a.m., the Dow Jones industrial average rose 227 points, or 2 percent, to 11,268. The Dow rose 272 points on Monday, its fourth-largest gain this year. The Dow is heading for its third day of gains.
The gains were broad. Every one of the 30 stocks in the Dow average rose. Twelve stocks rose for every one that fell on the New York Stock Exchange.
The Standard & Poor’s 500 index rose 22, or 1.9 percent, at 1,186. Materials and energy shares led the S&P higher.
The Nasdaq composite rose 42, or 1.7 percent, at 2,558.
Worries about Europe have weighed on the stock market for months. The S&P 500, a benchmark for many U.S. mutual funds, has fallen 7.4 percent over the past three months. It’s down 5.8 percent for the year.
Analysts say more needs to be done to fight Europe’s debt crisis. Finance ministers have been pushing to increase the size of Europe’s rescue fund. Economists also want the European Central Bank to lower interest rates to help spur the economy.
President Barack Obama said in a town hall meeting Monday that Europe’s financial crisis “is scaring the world” and that the actions the region’s leaders have taken so far “haven’t been as quick as they need to be.”
In the U.S., the Senate passed legislation late Monday to avert a government shutdown.
Home prices rose for a fourth straight month in most major U.S. cities in July. A report on Tuesday also showed that consumer confidence improved slightly in September after plummeting in August.
Walgreen Co. fell 4.4 percent after the drugstore operator said it is ending its relationship with Express Scripts Inc. That deal is worth $5.3 billion per year, but Walgreen said Express Scripts was not paying it enough money to fill prescriptions.