By DANIEL WAGNER, Associated Press
U.S. stocks leapt early Friday after European leaders agreed to a set of prescriptions for their debt crisis.
Leaders in Brussels unveiled a plan to bail out banks directly from a regional bailout fund. They said they would ease austerity measures that are causing political unrest and agonizing recessions in Greece and other nations that have received bailouts.
Fear about Europe has weighed on markets in recent weeks. Signs of improvement there tend to spark broad, if temporary, rallies.
The Dow Jones industrial average rose 175 points to 12,776 in the first 20 minutes of trading. The Standard & Poor's 500 index rose 20 to 1,349. The Nasdaq composite average added 47 to 2,896.
The news out of Brussels also lifted energy prices, on the theory that a cure to Europe's debt woes will remove one of the major drags on global growth. Benchmark oil jumped 5 percent, or $3.87, to $81.56 a barrel on the New York Mercantile Exchange, a day after hitting an eight-month low.
The two-day summit in Brussels is the 19th meeting for European leaders since the debt crisis emerged, and leaders have repeatedly clashed over how best to address it. European Council President Herman Van Rompuy called Friday's agreement a "breakthrough."
Consensus in Europe was reached after borrowing rates in Spain — where unemployment is approaching 25 percent — and Italy hit unsustainable levels. The fear was that the weaker economies of Europe would drag the entire continent into recession, or worse.
Stocks around the world surged Friday, with markets in countries on the front line of the crisis doing particularly well. Italy's FTSE MIB and Spain's IBEX indexes each rose more than 4 percent.
Perhaps more importantly, the yield on Spain's 10-year bond dropped by 0.46 percentage points to 6.44 percent. Italy's was down by 0.26 percentage points to 5.82 percent. The decrease reflects increased confidence by investors that the countries will be able to service their debts.
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