Stocks Surged on Europe Hopes

U.S. stocks surged to finish near the highest levels of the day Monday spurred by hopes that European policymakers were coalescing around a new plan to keep the sovereign debt crisis from spreading. The Dow Jones Industrial Average rose 272.38 points, or 2.53%, to 11,043.86. The S&P 500 ended up 26.52 points, or 2.33%, to 1,162.95. The Nasdaq Composite gained 33.46 points, or 1.35%, to 2,516.69.

Investors are hoping to hear some good news about Greek and European debt woes as eurozone countries continue to vote on expanding the European Financial Stability Fund (EFSF), which is the bailout fund for Europe’s cash-strapped countries, including Portugal, Italy, Ireland, Greece and Spain.

A CNBC report suggesting that there’s a plan in the works to shore up European banks gave investors a late-day confidence boost. The plan would allow banks weighed down by bad European sovereign debt to exchange it for bonds issued by the European Investment Bank, a bank owned by the member states of the European Union. The newly issued bond would be funded by the EFSF, the report said.

Oil futures on Monday snapped a three-day losing streak. Oil for November delivery added 39 cents, or 0.5%, to end at $80.24 a barrel on the New York Mercantile Exchange.

The interest rate on six-month Treasury bills rose at Monday’s weekly treasury auction after falling to an all-time low last week. The rate on three-month bills also rose. The Treasury Department auctioned $29 billion in three-month bills at a discount rate of 0.020 percent, up from 0.010 percent last week.