US Stocks

Stocks snapped a three-day slide as investors latched onto glimmers of hope in headlines from Germany, Italy and the U.S. The Dow Jones Industrial Average surged 275.56 points, or 2.47%, to 11414.86, closing at the day's highs. The Standard & Poor's 500-stock index advanced 33.38 points, or 2.86%, to 1198.62, while the Nasdaq Composite ran up 75.11 points, or 3.04%, to 2548.94. Leading the gainers were financial stocks, with shares of Bank of America rallying 7% after the nation's biggest lender shook up its management team.

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The Charlotte, N.C., bank ousted the heads of its wealth-management and consumer-banking units, Sallie Krawcheck and Joe Price, and installed David Darnell and Thomas Montag as co-chief operating officers. Other banks pushed higher, with Morgan Stanley gaining 6.5% and Citigroup adding 4.6%. Energy stocks were also strong, as oil surged 3.9% to $89.34 a barrel, its biggest one-day jump in a month. Chevron added 3.9%, and Exxon Mobil advanced 3.5%. Technology stocks also fared well, with Yahoo getting a 5.4% lift after the company said Carol Bartz had been removed as chief executive. It named Chief Financial Officer Tim Morse interim CEO.

Cisco Systems gained 3.9%, and Intel gained 2.8%. Some of the afternoon gains came after Italy's senate approved an austerity plan that totals more than EUR50 billion ($70 billion) in fiscal savings and extra tax revenue. The plan is designed to balance the budget in 2013 and help the government bring down Italy's enormous debt, which amounts to 120% of its gross domestic product the second-highest ratio in the euro zone, after heavily indebted Greece.

Having passed the senate, the plan will go Thursday to the lower house, where it will be reviewed by the budget commission ahead of a vote. Final approval to enact the package is expected in a matter of days. Separately, the Federal Reserve's beige book report showed sluggish economic activity in most of the U.S., with some areas seeing a slowdown in manufacturing.

European Markets

European equity markets rallied Wednesday after three days of losses, with Greek stocks surging 8% after a ruling by Germany's Federal Constitutional Court upheld the participation of the euro zone's biggest member in bailouts of the bloc's indebted nations. German stocks also surged, and the Stoxx Europe 600 index rose 3.1% to end at 228.84. The German court ruled against plaintiffs that had sought to block the bailouts and affirmed the legality of Germany's role in the creation of the European Financial Stability Facility.

However, it also said the German government would have to get approval from parliament's budget committee before participating in future bailouts. A second source of support for stocks came from better than expected German industrial-production data that suggested Europe's largest economy may not be as close to recession as many fear. Output rose 4.0% in July, handily besting expectations of a 0.5% increase.

The day's biggest moves were in Greece, which remains under pressure from other euro governments to address its overshooting budget deficit before it receives more aid. The ASE Composite index surged 8% to 929.45. National Bank of Greece soared 23% and EFG Eurobank Ergasias jumped 15%. The German DAX 30 index rallied 4.1% to 5405.53, led by BMW, up 6%, Daimler, up 5.9%, and Commerzbank, up 5.8%. Italy's FTSE MIB index rose 4.2% to 14645.96, aided by an 8% jump in car maker Fiat. Car stocks also rose in France, where Renault surged 7.4% and tire maker Michelin leapt 5.3%. The CAC gained 3.6% to 3073.18. Higher oil prices boosted Total, which rallied 3.7% in Paris, and BP, which gained 4% in London. The FTSE 100 rose 3.1% to 5318.59.

Asian Markets

Asian markets rallied Wednesday, with investors jumping into stocks tied to global economic growth, and shares of Japanese exporters benefiting from a Swiss-made drop in the yen. On the heels of three straight sessions of losses, South Korea's Kospi jumped 3.8% to 1833.46 and Japan's Nikkei Stock Average rose 2% to 8763.41. Hong Kong's Hang Seng Index rose 1.7% to 20048.00, while the Shanghai Composite Index advanced 1.8% 2516.09 and India's Sensex rose 1.2% to 17065.00.

Japanese exporters, including auto makers and tech companies, got a boost after the yen fell sharply following the Swiss National Bank's move to cap the Swiss franc's strength, saying it would do what it takes to defend a floor value for the euro of CHF1.20. Toyota Motor added 2.9% and Sony gained 3.2%. Shares of Yahoo's major corporate partners in Asia rose after the U.S. company announced its board has removed Carol Bartz as the company's chief executive officer and is conducting a comprehensive strategic review.

Yahoo Japan Corp., controlled by Yahoo and Japanese wireless major Softbank, rose 1.9%. Softbank gained 3.9%. In Hong Kong, Alibaba.com rose 3.1%. Alibaba's corporate parent, a strategic partner of Yahoo, was recently engaged in a dispute with the U.S. company over the spin-off of Alibaba's Alipay unit, previously been part-owned by Yahoo and Softbank. Investors in South Korea scooped up tech shares after their recent selloff. Samsung Electronics added 6.3%, LG Electronics surged 9.1% and Hynix Semiconductor climbed 15% the daily limit.

Commodities

Recovering risk sentiment and a weaker dollar sent base metals to a strong close on the London Metal Exchange Wednesday, although market players warned that gains in metals could yet be eroded by shifts in fragile macro sentiment. At the close, flagship three-month copper was 1.8% higher at $9,092 metric ton. Nickel rose the most, closing the session at $21,770/ton, up 5.3% on the day. Oil futures settled at their highest level in more than a month Wednesday, boosted by a sharp rally in the equities markets.

Light, sweet crude for October delivery settled up $3.32, or 3.9%, at $89.34 a barrel on the New York Mercantile Exchange, the highest settlement since Aug. 3. Brent crude on ICE Futures Europe settled up $2.91, or 2.6%, at $115.80 a barrel. Gold posted its second day of losses as investors were lured away from the safe haven to chase robust gains in equity markets.

The most actively traded gold contract, for December delivery, settled $55.70, or 3%, lower at $1,817.60 a troy ounce on the Comex division of the New York Mercantile Exchange. The contract touched a low of $1,793.80, trading below $1,800 for the first time in five sessions. Thinly traded September-delivery gold fell $55.70, or 3%, to $1,814.20 a troy ounce after touching lows of $1,792.80.