U.S. stocks rally on E.Z. optimism; Dow Jones up 2.59%

Investing.com - U.S. stocks were sharply higher on Monday, as market sentiment improved amid hope for a European fiscal agreement aimed at tackling the debt crisis in the euro zone. 

During early U.S. trade, the Dow Jones Industrial Average climbed 2.59%, the S&P 500 index advanced 3.01%, while the Nasdaq Composite index jumped 3.01%.

Market sentiment was boosted by reports that European Union leaders were negotiating the details of a fiscal pact to halt the spread of the region’s debt crisis.

The pact would make budget discipline legally binding and enforceable by European authorities and would give the European Central Bank more scope to undertake large scale bond purchases.

In the U.S., retail sales climbed 16% as consumers stormed the malls and took to the Web during Thanksgiving weekend, spending a record USD52.4 billion.

Financial stocks led gains as shares in Citigroup surged 6.73% and Bank of America climbed 5.61%, while Goldman Sachs and JP Morgan jumped 4.75% and 4.92% respectively.

Elsewhere, oil giant Andarko Petroleum soared 5.48% after saying its major gas finds offshore in Mozambique were actually twice as large as it earlier thought, adding support to hopes that East Africa will become another major gas production center.

Other energy stocks were sharply higher as shares in Chevron advanced 3.55% and Exxon Mobil climbed 2.46%, while Alpha Natural Resources skyrocketed 7.81%.

Steelmaker Ternium jumped 2.80% after announcing on Sunday that it would pay USD2.2 billion to buy a stake in Brazilian rival Usiminas from two of its minority shareholders, despite difficult conditions for mills in the continent's largest economy.

Meanwhile, Amazon saw shares advance 5.16% and Google rose 2.83%, while
Netflix jumped 6.54% as Cyber Monday kicked off.

Across the Atlantic, European stock markets were sharply higher. The EURO STOXX 50 surged 4.77%, France’s CAC 40 jumped 4.79%, Germany's DAX climbed 4.31%, while Britain's FTSE 100 advanced 2.80%.

During the Asian trading session, Hong Kong's Hang Seng Index surged 2.05%, while Japan’s Nikkei 225 Index gained 1.6%.

Also Monday, Moody's Investors Service warned that the rapid escalation of the sovereign and banking crisis in the single currency bloc was threatening the credit ratings of all European government bonds.

Later in the day, the U.S. was to release official data on new home sales.