NEW YORK — A late rally pushed the Dow Jones industrial average back above 12,000 Monday as investors responded to the latest twists in Europe’s efforts to control its debt crisis.
U.S. indexes were down for much of the day on worries that Italy could become the next country to run into trouble. Stocks turned higher after 2 p.m. Eastern time on news that Greece would receive the latest installment of emergency aid as long as the country’s two main parties commit to implementing economic reforms agreed to by the country’s previous government.
Investors again reacted to whatever was the latest headline out of Europe. The region’s problems have been offsetting optimism about strong corporate earnings in the U.S. and signs of improvement in the economy.
“Every day it seems like it’s the butting of heads between whatever the latest rumor is out of Europe with good economic data and corporate earnings,” said Karyn Cavanaugh, a market strategist with ING Investment Management. “It’s overshadowing the fact that earnings are on track to be the best year ever.”
The Dow rose 85.15 points, or 0.7 percent, to close at 12,068.39. The Dow closed near its highest point of the day and had been down as many as 102 points. Hewlett-Packard rose 3.4 percent, the most of the 30 stocks in the Dow.
The Standard & Poor’s 500 index rose 7.89, or 0.6 percent, to 1,261.12. Last week the S&P had its first down week since September. The Nasdaq rose 9.10, or 0.3 percent, to 2,695.25.
Worries that Italy could become the next victim of Europe’s debt crisis kept investors uneasy. Italy’s borrowing rates spiked Monday to the highest level since the country adopted the euro. Unlike Greece, Portugal or Ireland — all of which received financial lifelines — Italy has too much debt to be rescued by its European neighbors.
The worries over Europe’s debt problems lifted the prices of assets seen as safe havens, such as Treasury notes and gold.
