Stocks surged on Thursday, with the Nasdaq up 3 percent after China denied a report that it was reviewing its holdings in euro-zone sovereign bonds due to the region's debt crisis. Microsoft Corp gained after FBR Capital Markets upgraded the stock to outperform.

The Dow Jones industrial average <.DJI> gained 222.11 points, or 2.23 percent, to 10,196.56. The Standard & Poor's 500 Index <.SPX> gained 26.85 points, or 2.51 percent, to 1,094.80. The Nasdaq Composite Index <.IXIC> gained 66.75 points, or 3.04 percent, to 2,262.63.

(Reporting by Edward Krudy; Editing by Jan Paschal)