NEW YORK — Stocks rose broadly Tuesday on hopes that Europe was moving closer to resolving its debt crisis. The Dow Jones industrial average closed up 146, giving up about half of its gains from earlier in the day.
German Chancellor Angela Merkel said her country would do whatever it could to help Greece regain investors’ confidence. Greece’s finance minister also said that country would receive the next round of bailout loans in time to avoid a default.
Greece was at risk of running out of money by mid-October if it did not receive the funds.
“Europeans are finally starting to understand that they need to act with some force to get ahead of the European debt crisis,” said John Briggs, a fixed-income strategist at RBS.
The Dow rose 146.83 points, or 1.3 percent, to close at 11,190.69. It had been up as many as 325 points earlier. The Dow has added 419 points over the past two days, making up more than half of last week’s 737-point plunge.
The Standard & Poor’s 500 rose 12.43, or 1.1 percent, to 1,175.38. Materials stocks led the S&P higher. Specialty metals company Allegheny Technologies rose 7.4 percent, the most in the index. All 10 company groups that make up the index rose.
The Nasdaq composite rose 30.14, or 1.2 percent, to 2,546.83.
Small companies rose more than larger ones, a sign that investors were moving money into riskier investments. The Russell 2000, a benchmark for small-cap stocks, rose 2.2 percent.
The encouraging signs from Europe also sent commodities prices higher. Oil soared 5.3 percent, copper 4.8 percent. That helped the stocks of energy producers and mining companies. Gold rose 3.6 percent, its first gain in a week.
Analysts cautioned that even a small dose of bad news from Europe or the U.S. economy could push stocks back down again.
“This is a news, rumor-driven rally,” said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research in Cincinnati. “This is still a very, very risky market.”
That was evident late in the day when the Financial Times reported that a split had emerged among European leaders over the bailout terms for Greece’s debt. The Dow had been up nearly 300 points shortly before the Financial Times published the report on its website at 2:48 EDT. Within an hour, those gains faded and the Dow closed up 146 points.
