Nov. 3, 2011 at 4:06 PM ET
By msnbc.com staff
It was rare — rare for the last week or so anyway — good news out of Europe that sent stocks rallying Thursday, including a final push in the last hour of trading that had stocks ending near their highs for the day.
Greek Prime Minister George Papandreou backed off his plan to put austerity measures to a national referendum. If the country had voted them down, investors feared a carefully constructed bailout package for the troubled nation would fall apart.
The Dow lost 573 points the first two days of this week on fears that the measure would be defeated and push Europe closer to a financial crisis. The prime minister was in an emergency meeting Thursday after members of his government called for him to step down.
Also the European Central Bank surprised markets early by cutting its benchmark interest rate a quarter of a percentage point, to 1.25 percent. The bank had increased its key rate twice this year, but that was before Mario Draghi took over as head of the bank this week. The announcement sent European stock indexes modestly higher as investors hoped that lowering borrowing costs would help prevent a recession in Europe.
According to preliminary calculations the Dow Jones industrial average ended the day 208.21 higher, or 1.76 percent, to 12,044.25. The S&P 500 was up 23.24, or 1.88 percent, to 1,261.14. The Nasdaq rose 57.99, or 2.20 percent, to 2,697.97.
Thursday’s economic news was mixed, and may have contributed to an early swoon in trading before stocks returned to higher territory. First-time applications for unemployment benefits eased somewhat, factory orders rose. However, an index measuring activity in the service sector was down in October.
Associated Press contributed to this report.