US stocks rallied on news of Libya's announcement of immediate ceasefire.

The S&P 500 Index closed up 5.48 points, or 0.43 percent, at 1,279.20. The Dow Jones Industrial Average climbed 83.93 points, or 0.71 percent, to end at 11,858.52.  The Nasdaq Composite closed up 0.29 percent.

Earlier, Libyan foreign secretary Moussa Koussa said on state TV that the ruling government “decided on an immediate ceasefire and on an immediate stop to all military operations.” This conciliatory announcement is in response to the no-fly zone over Libya that was previously announced by the United Nations.

On this news, crude oil futures immediately plunged from about $104 per barrel to about $102 per barrel because concerns over the further disruption in the oil production of Libya and Middle East countries were eased.

This is a positive development for US equities.

Moreover, global risk sentiment was boosted by the G7's announcement of coordinated intervention to weaken the Japanese yen. The Japanese yen had strengthened significantly following the country’s tragic earthquake -- the fear was that the high yen would drag Japan into a recession.