NEW YORK — Stocks had another turnaround Thursday and rocketed higher after China reassured investors it doesn’t plan to sell the European debt it holds.
The Dow Jones industrial average surged nearly 285 points.
Treasury prices tumbled as traders funneled money into riskier assets such as stocks and commodities.
China’s show of confidence in Europe let the market resume a rally that had stalled late Wednesday after a report that the Chinese government was considering cutting its European debt holdings. Such a move would have signaled that China didn’t think Europe would be able to contain its debt crisis.
The agency that manages China’s $2.5 trillion in foreign reserves denied the report.
The Dow rose 284.54, or 2.9 percent, to 10,258.99. It was the biggest gain for the Dow since it soared 405 points on May 10 after the European Union announced a bailout for debt- strapped countries.
The climb vaulted the Dow back above 10,000. It closed below that psychological benchmark on Wednesday for the first time since February.
The Standard & Poor’s 500 index rose 35.11, or 3.3 percent, to 1,103.06. The Nasdaq composite index climbed 81.80, or 3.7 percent, to 2,277.68, putting it back in the black for 2010.
Analysts said some bounce has been expected after the slide that drove the Dow down 11 percent from its 2010 peak a month ago. But traders cautioned this might not be a rally, but merely a break in selling.
Some of the climb could be tied to what’s called “short-covering.” That occurs when traders are forced to buy stock after having earlier sold borrowed shares in a bet that the market would fall. Though it’s difficult to determine how much lift short-covering might be giving stocks, the rush to cover misplaced bets can add to a rally.
The steep gains Thursday were welcome after the Dow dropped eight of the prior 10 days. Twice this week, stocks have climbed for much of the day only to see the advances erased in late slides.
