Global stocks in record rally on European rescue

By Herbert Lash

NEW YORK (Reuters) - Global stocks surged to record single-day gains on Monday, bouncing off 5-year lows, while oil prices rose, after governments in Europe took bold steps to quell the global financial crisis and avert a deep recession.

U.S. stocks posted their largest one-day percentage rise ever, with all three major indices rising more than 11 percent, while a key European index surged by a record 10 percent.

The Dow Jones industrial average .DJI closed up 936.42 points, or 11.08 percent, at 9,387.61. The Standard & Poor's 500 Index .SPX surged 104.13 points, or 11.58 percent, at 1,003.35. The Nasdaq Composite Index .IXIC advanced 194.74 points, or 11.81 percent, at 1,844.25.

Crude oil prices jumped more than 4.0 percent along with other commodities, and euro zone government debt prices fell as the European banking system rescue, designed to shake a global credit crunch out of a deep freeze, removed a flight-to-safety bid.

The jump in U.S. equities erased the previous one-day record of more than 5.73 percent seen in the benchmark S&P 500 two days after the Black Monday crash of October 1987.

The U.S. Treasury market for government debt was closed for the Columbus Day holiday.

Britain, Germany, France, Italy and other European governments pledged hundreds of billions of dollars to recapitalize ailing banks and boost flagging confidence in the world's wobbly financial system.

The U.S. Federal Reserve, the European Central Bank, the Bank of England and the Swiss National Bank also said they would lend commercial banks as much U.S. dollar liquidity as they needed at fixed rates to restart interbank lending.