Dow up 339 points at close as European plan boosts optimism [Updated]
[Updated, 1:12 p.m., Oct. 27: This updates an earlier story with closing index numbers.]
The Dow Jones industrial average closed up 339 points Thursday after European leaders unveiled a financial rescue plan and the data showed the U.S. economy growing at a faster clip in the third quarter than earlier in the year.
The Dow rose 339 points, or 2.9%, to 12,208, extending the gains it has made over the last four weeks and putting it up more than 5% year to date.
The broader Standard & Poor's 500 stock index was up 3.4%, putting it back in the black for the year.
European leaders announced that private holders of Greek debt had agreed to accept 50% losses on the bonds. As part of the deal, other European countries will take several measures to stabilize the continent's financial system. Worries that Europe's debt problems would create another global financial crisis had hurt stock markets around the world in recent months.
Stocks soared in Europe on Thursday, with key indexes ending the day up 6.3% in France and 5.4% in Germany.
Before U.S. markets opened Thursday, the Commerce Department said the U.S. economy grew at a 2.5% annual rate from July to September, up from a 1.3% growth rate in the previous quarter. In addition, the Labor Department said the number of people filing for unemployment claims last week fell slightly from the week before. The data calmed recent fears that the United States was heading into another recession.
Although investors cheered the news, some economists warned that the European debt plan might provide only temporary relief, and that the U.S. economy could still be in for a period of slower growth.
— Nathaniel Popper
Photo: The floor of the New York Stock Exchange. Credit: Spencer Platt / Getty Images