Stocks rose 3 percent on Wednesday as major central banks jointly added liquidity to the world's financial system, easing worries about a global downturn.
The Federal Reserve and the European Central Bank as well as the central banks of Canada, Britain, Japan and Switzerland agreed to lower the cost of temporary dollar loans to banks by half a percentage point.
The move helped to ease investor worries about another financial crisis or recession, but the euro zone debt problems remain unresolved and could continue to plague markets.
Wednesday's rally put the S&P 500 on track for its best daily percentage gain since August.
The Dow industrials were poised to end the month of November slightly higher, while both the S&P 500 and the Nasdaq looked likely to end the month in the red. The S&P 500 was down 1.3 percent for November.
Among the day's biggest gainers were the most economically sensitive sectors, including financials, energy, materials and industrials, though all S&P 500 sectors advanced. Bank of America Corp
I don't see the global economy going into recession. In fact, today's movement by the central banks to inject massive liquidity, I think, cushions the global economy, said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
The Dow Jones industrial average <.DJI> was up 408.11 points, or 3.53 percent, at 11,963.64. The Standard & Poor's 500 Index <.SPX> was up 41.92 points, or 3.51 percent, at 1,237.11. The Nasdaq Composite Index <.IXIC> was up 83.45 points, or 3.32 percent, at 2,598.96.
Copper and oil futures also rose sharply.
The S&P materials sector index <.GSPM> gained 4.9 percent.
The central banks' actions were intended to ensure that European banks, facing a credit crunch, have enough funding amid the euro zone's worsening sovereign debt crisis.
The moves followed an unexpected cut in bank reserve requirements in China, intended to boost an economy running at its weakest pace since 2009.
Further encouraging investors, the latest U.S. data suggested the U.S. economy was moving more solidly toward recovery. The U.S. private sector added the most jobs in nearly a year in November, while business activity in the U.S. Midwest grew faster than expected in November.
(Reporting by Caroline Valetkevitch; Additional reporting by Edward Krudy; Editing by Jan Paschal)