US Market

U.S. stocks rose as euro-zone leaders negotiated a new pact to stem Europe's sovereign-debt crisis and a strong start to the holiday shopping season helped boost the retail sector. The Dow Jones Industrial Average jumped 297 points, or 2.6%, to 11528 in Monday afternoon trading, and was poised to snap a four-day losing streak. All 30 blue-chip components were in the black. The rally followed a 26-point loss Friday and a weekly fall of 4.8% that marked the worst Thanksgiving-week performance since markets began closing in observance of the holiday in 1942.

The Standard & Poor's 500-stock index climbed 34 points, or 3%, to 1193, as all but five of the broad index's components rose. Materials and energy stocks posted the largest rise, leaping more than 3.6%. The technology-oriented Nasdaq Composite rallied 84 points, or 3.4%, to 2528.

Before the open Monday, the New York Stock Exchange put into effect its Rule 48, which helps smooth trading in sessions when stocks stage big swings. It has invoked the rule several times since markets turned volatile in August. Financial stocks, though well ahead, were off session highs. Morgan Stanley stock analysts cut their rating on the U.S. large-capitalization banking sector to reflect the chance of a fourth-quarter recession in Europe and other headwinds for global economic growth. Bank of America gained 2.5% and Citigroup added 6.5%.

Sales on Black Friday, the day after Thanksgiving, rose 6.6% from a year ago, and sales for the four days starting on Thanksgiving increased 16%, according to ShopperTrak. Meanwhile, the National Retail Federation said shoppers spent 9.1% more on Black Friday than they did last year. The overall retail sector benefited from the strong start to the holiday shopping season. The SPDR S&P Retail exchange-traded fund rose 3.5%. Amazon.com rallied 6.5% as Cyber Monday kicked off, and after the online retailer said it sold four times more Kindle devices on Black Friday than it did last year. Consumer-electronics retailers also showed strength, with Best Buy rising 3.8%. Separately, Apple rose 3.4%.

European Markets

European stock markets soared Monday after media reports indicated the region's leaders were making progress in addressing the euro-zone debt crisis. The Stoxx Europe 600 index rose 3.8% to close at 229.84. Banks, which have been among the biggest decliners throughout the crisis given their exposure to indebted nations, were among the biggest gainers. ING Groep NV rose 11.2%, BNP Paribas SA jumped 10.3% and Societe Generale SA rose 9.6%.

The French CAC 40 index rallied 5.5% Monday to 3,012.93, with financials as well as stocks tied to global economic growth contributing to gains. Shares of insurer AXA SA surged 13.1% and car makers Peugeot SA and Renault SA both rose more than 7%. Steelmaker ArcelorMittal SA gained 7.8%. The German DAX 30 index jumped 4.6% to 5,745.33. Deutsche Bank AG gained 7.2% and auto group Daimler AG rose nearly 8%.

Britain's top share index rallied on Monday as financial and basic resources stocks advanced, helped by hopes that euro zone leaders were moving closer to action to stem a debt crisis in the region.London's blue chips added 148.11 points in its second consecutive day of gains after nine straight sessions of declines, as equities across Europe and the United States rose and yields on distressed euro zone bonds declined.The rally was triggered by an unsourced report in Italian daily La Stampa, which suggested the International Monetary Fund was preparing a rescue plan for Italy worth up to 600 billion euros ($796 billion). This was later dismissed by an IMF spokesperson.

London's blue chip gauge broke through the 38.2 percent Fibonacci retracement of the July high to August low, as it extended a bounce after closing above the 23.6 percent support on Friday. Banks and miners, which suffered some of the worst losses during the recent sell-off, led the charge on Monday, adding 28.4 points
and 24.4 points to the FTSE 100.

Miners were also supported by positive comments by Nomura, which argued the sector had been hit too hard in the macro sell-off, driven by global growth worries. Shore Capital's Lane maintained a defensive approach but highlighted that certain perceived safe havens such as food producers are overvalued, while cyclicals including mining and consumer discretionary stocks appear cheap. Weir rose 8.3 percent to top the blue-chip gainers chart as Barclays Capital became the latest of a string of brokers raising their price targets on the maker of pumps and valves, following the acquisition of shale gas specialist Seabord Holdings last week.

Randgold, down 7.9 percent, was the only blue chip to close in the red after the gold miner cut its output target due to a series of problems at its Tongon mine in the Ivory Coast. While stocks rebounded, strategists remained wary of going back into the market until there is certainty that decisive political action is being taken to stem the euro zone's debt crisis.

In a sign of the urgency of the euro zone's situation, Moody's warned that the rapid escalation of the region's sovereign and banking crisis threatens the rating of all European government bonds. The announcement comes as the euro zone's second-largest economy, France, battles to defend its triple-A rating, a necessary condition for the bloc's rescue fund, the European Financial Stability Facility, to maintain its own top-notch rating. S&P's Quinn believes some form of "bazooka option", designed to prevent the sovereign crisis from spiralling into a credit crunch, will need to be put in place by January, when the funding and refunding cycle for banks and sovereigns resumes at full speed.

France and Germany, which aim to outline proposals for a fiscal union before a European Union summit on December 9, were stepping up a drive for coercive powers to reject euro zone members' budgets that breach EU rules ahead of a meeting of euro zone finance ministers in Brussels tomorrow.

Asian Markets

Asian shares jumped Monday, as investors reacted to the latest reports of measures designed to get a grip on Europe's debt crisis. Hong Kong's Hang Seng Index rose 2% to 18037.81, while Japan's Nikkei Stock Average advanced 1.6% to 8287.49. South Korea's Kospi climbed 2.2% to 1815.28, the Shanghai Composite Index edged up 0.1% to 2383.03 and India's Sensex rose 3% to 16167.13. Europe remained the focus for Asian markets, with a variety of reports over the weekend suggesting progress on addressing the euro-zone debt crisis.

A separate news item appearing in Italy's La Stampa over the weekend had said the International Monetary Fund was discussing fresh financial support for Italy, further helping boost Asian shares Monday, but an IMF spokesperson subsequently denied any such plans. Banks and commodity-sector firms were among the notable gainers Monday in Asia. Nomura Holdings Inc. jumped 4.4% in Japan, while Industrial & Commercial Bank of China Ltd. rose 3.4% and Agricultural Bank of China Ltd. gained 3.6% in Hong Kong.

Strength in many commodities amid the reported progress in Europe also helped boost many Asia resource stocks. Japanese energy major JX Holdings Inc. climbed 3.1%, while Sumitomo Metal Industries Inc. advanced 4.1%. Hong-Kong-listed Jiangxi Copper Co. climbed 3.6%, and shares of Angang Steel Co. rose 6.1%. Exporters got a lift in Tokyo, with Sony Corp. climbing 2.3%, Nintendo Co. adding 2.7%, Panasonic Corp. gaining 3.1%, and Toshiba Corp. up 4.6%.

Commodities

Copper closed 3.7% higher on the London Metal Exchange Monday after optimism that euro-zone leaders are nearing a deeper pact to address the region's debt crisis boosted demand for riskier investments. LME three-month copper ended the session at $7,495 a metric ton, up $265 from Friday's PM kerb close. The red metal had traded as high as $7,535/ton during open outcry trading--the market's highest level since Nov. 18. Reports that the International Monetary Fund could provide EUR400 billion-EUR600 billion in financial assistance to Italy helped confidence too, although the IMF publicly denied any such talks.

A sharp rise in the euro against the greenback amid the fresh euro-zone optimism has been in itself positive for the metals, which are priced in dollars and therefore tend to share a negative correlation with the U.S currency. LME copper, which hit a one-month low of $7,100.25/ton last week amid steep losses across the broader markets, may now have further room to rise, Sucden Financial said in a weekly report. Short-term technical charts indicate the market's recent pullback is easing, and show support near $7,029/ton, Sucden analysts said. There is now the "potential for tests of strength to develop."

Oil futures prices surged Monday after reports that the European Union is considering banning oil imports from Iran, the latest escalation in tensions over the country's
nuclear program. Light, sweet crude for January delivery settled up $1.44 at $98.21 a barrel on the New York Mercantile Exchange. Nymex crude rose as high as $100.74 a barrel during European trading hours, the first time the contract hit triple digits in more than a week. Gold rebounded to a one-week high as last week's selling pressures were replaced with hopes of a stronger effort by euro-zone leaders to stem the spread of the sovereign debt crisis. The most actively traded contract, for December delivery, rose $25.10, or 1.5%, to settle at $1,710.80 a troy ounce on the Comex division of the New York Mercantile Exchange.