Stocks climbed on Thursday as signs of progress on the U.S. debt talks and concrete action from Europe on its own debt crisis heartened investors.
Unexpectedly robust results from Morgan Stanley
But the biggest news was on a possible U.S. debt deal to save the United States from an unprecedented default.
We started drifting until we got a report that the president and the speaker of the house were close to an accord, and the market shot up like a rocket at that point, said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.
The KBW Capital Markets index <.KSX> rose 2.9 percent.
In Europe, following a summit, euro zone leaders agreed the private sector would provide a net 37 billion euros to a second bailout package for Greece, with the total official financing around 109 billion euros.
The Dow Jones industrial average <.DJI> gained 152.50 points, or 1.21 percent, to 12,724.41. The Standard & Poor's 500 Index <.SPX> rose 17.96 points, or 1.35 percent, to 1,343.80. The Nasdaq Composite Index <.IXIC> advanced 20.20 points, or 0.72 percent, to 2,834.43.
Stocks moved to session highs after the White House said it saw momentum for a balanced deficit deal, but it denied reports that U.S. President Barack Obama and Republican U.S. House of Representatives speaker John Boehner were close to a pact.
Transportation shares also contributed to gains after Union Pacific Corp
Biotechnology issues also rose. Alexion Pharmaceuticals Inc
On the downside, Dow component Intel Corp
Volume saw an upswing with about 8.09 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, above the daily average of 7.49 billion.
Advancing stocks outnumbered declining ones on the NYSE by 2,412 to 595, while on the Nasdaq, advancers beat decliners 1,752 to 814.
(Reporting by Chuck Mikolajczak; editing by Leslie Adler)