By PNA / Xinhua and U.S. News Agency / Asian
The U.S. stocks surged on Friday, with major indexes posting best gains since June 6, after European Union (EU) leaders agreed to take action to battle the region’s debt crisis.
After hours of discussions, the EU summit ended with several concrete measures — both short-term and long-term — aimed at stemming the continent’s spiraling debt crisis.
Investors were especially pleased to hear that the eurozone’s two bailout funds, better known by their acronyms EFSF and ESM, will be able to recapitalize banks directly rather than first hand over the money to the government of the country where the banks are based. The move was believed to be very effective in the short term as it can stop banks from piling debt onto already stressed governments.
Meanwhile, the EU decided to allow countries that comply with its budget policies to access the rescue funds to support their sovereign bond markets.
On the economic front, the U.S. Commerce Department reported that consumer spending was flat in May, the first time in five months, while income rose 0.2 percent.
In midday trading, the Dow Jones industrial average gained 218. 61 points, or 1.73 percent, to 12,820.87. The Standard & Poor’s 500 rallied 25.39 points, or 1.91 percent, to 1,354.43. The Nasdaq Composite Index surged 67.16 points, or 2.36 percent, to 2,916.65.