Global stocks rise on European bank moves

US stocks rose for a third day in a row on Thursday as developing euro zone plans to backstop European banks gave investors hope the threat of a financial crisis was waning.

Bank shares led gains on Wall Street as the EU planned to recapitalize banks. The European Central Bank said it was ready to buy bonds to provide longer-term cheap money for European lenders in need of funding.

The Dow Jones industrial average gained 183.38 points, or 1.68 percent, to 11,123.33. The S&P 500 gained 20.94 points, or 1.83 percent, to 1,164.97. The Nasdaq Composite gained 46.31 points, or 1.88 percent, to 2,506.82.

European shares rose to hit a five-week closing high, with banks among the best performers on hopes policymakers will come up with coordinated action to recapitalise struggling lenders.

The pan-European FTSEurofirst 300 index of top shares closed up 2.6 percent at 940.65 points in a choppy session, with the index briefly paring gains after the European Central Bank left interest rates unchanged.

The Nikkei stock average snapped a four-day losing streak, helped by a short-covering on a rally in commodities and hopes that Europe's policymakers would take steps to shore up the region's banking system.

The Nikkei closed up 1.7 percent at 8,522.02. The broader Topix added 1.5 percent to 736.86, after falling below its post-quake low of 725.90 yesterday. Volumes fell, suggesting investors remained wary.