Stocks Opened Sharply Up on Euro Zone Summit Optimism

Stocks rallied at the start on Monday as optimism grew that an upcoming European Union summit would break new ground to resolve the euro zone debt crisis.The Dow Jones Industrial Average lately climbed 142.06 points to 12,161.48. The S&P 500 Index rose 16.42 points to 1,260.70. The Nasdaq Composite added 25.54 points to 2,652.47.

European leaders will meet this week for yet another summit to discuss ways to solve the deepening debt crisis, and this time they are talking about rewriting European Union treaties. The key players — Germany, France and the European Central Bank — all broached the subject last week, saying closer political and economic ties are needed to ensure the future of a unified Europe.

Investors appeared confident on Monday that German Chancellor Angela Merkel and French President Nicolas Sarkozy would make progress toward tighter fiscal ties across the 17-nation euro zone in a crucial week for Europe’s shared-currency project. Set to meet in Paris ahead of a European Union summit on Friday, the leaders of the euro zone’s two largest and most powerful members are expected to work toward resolving differences after pledging to ensure closer fiscal union.

Italy’s new premier began trying to persuade a skeptical Parliament that his new plans to cut spending and boost growth will return Italy’s ailing economy to health, as Europe entered a crucial week for the survival of the 17-nation euro currency. Premier Mario Monti was briefing both Parliament chambers Monday on the package, which includes euro30 billion ($40.5 billion) in spending cuts and tax hikes and euro10 billion ($13.5 billion) to boost Italy’s anemic growth.

The bankruptcy estate of Lehman Brothers Holdings is close to naming a new board of directors to help finish winding down the collapsed financial firm, the Wall Street Journal said, citing people familiar with the matter.