Further signs that global credit markets are loosening up gave Wall Street a boost Monday, driving the Dow Jones industrial average up more than 400 points.
Investors were also cheered by hints from Federal Reserve Chairman Ben S. Bernanke that more help may be on the way for the embattled U.S. economy.
"By no means are we back to normal, but there are early signs that credit markets are beginning to thaw," said Nick Sargen, chief investment officer of Fort Washington Investment Advisors in Cincinnati.
The Dow industrials surged 413.21 points, or 4.7%, to 9,265.43. All 30 stocks in the index rose, led by energy giants Exxon Mobil and Chevron, which gained on higher oil prices. Crude futures climbed $2.40 to $74.25 a barrel.
And in a rare achievement after weeks of volatile trading, the Dow never fell below Friday's close of 8,852.22.
Broader indexes also rose sharply. The Standard & Poor's 500 jumped 44.85 points, or 4.8%, to 985.40. The Nasdaq composite rose 58.74 points, or 3.4%, to 1,770.03. Winners outnumbered losers 5 to 1 on the New York Stock Exchange, though volume was relatively light.
Investors were heartened by a continued steady decline in interest rates on loans between banks as measured by the so-called LIBOR indexes, signaling that banks are more willing to lend to one another -- a key to resolving the credit crisis.
In addition, the yield on the three-month Treasury bill rose above 1% for the first time in two weeks, suggesting investors may be shifting cash from supersafe government securities into stocks.
"In light of all the things that policymakers in the U.S. and overseas have done, the fears of the collapse of the financial system are starting to recede," Sargen said, referring to the broad range of bailout measures taken by governments around the globe to keep financial markets afloat.
In the latest move, the Dutch government provided $13.4 billion to support banking and insurance giant ING. That helped bolster overseas markets before Wall Street opened.
Key stock indexes climbed 5.4% in London, 3.6% in France and 3.9% in Tokyo.
In testimony before the House Budget Committee, Bernanke warned that the economy faced several quarters of weakness. He added, however, that another round of stimulus from the government could bolster the economy.
Also helping stocks was an unexpected increase in the Conference Board's index of leading economic indicators in September. It was the first increase in five months.
Sargen and other analysts, however, caution that the economic head winds facing the global economy remain brisk, all but guaranteeing that the volatility of recent weeks isn't at an end. The Dow industrials have notched a triple-digit increase or decrease in 23 of the last 26 trading sessions.
"We've been seeing swings every day of several hundred points," noted Joe Battipaglia, market strategist at Stifel Nicolaus & Co. "Today is no different from any other except that this is one of the positive ones."
He noted that many of the measures announced by the U.S. government -- including buying troubled securities from investment firms and taking direct equity stakes in banks -- have yet to be implemented. Until those measures take hold, he said, the market will remain on shaky legs.
"The next piece of bad news," Battipaglia said, "and this market will go back down again."
Investors are face a slew of third-quarter earnings reports this week. Among those reporting Monday, oil-field service provider Halliburton and financial-service giant American Express topped estimates.
Shares of Halliburton soared 14%, while American Express climbed 4.4%.
Due to report results today are Apple and Yahoo, as well as heavy equipment maker Caterpillar and United Airlines parent UAL.
Among other market highlights Monday, NRG Energy shot up 29% after utility operator Exelon made an unsolicited, $6.2-billion bid for the wholesale power generator.