NEW YORK (CNNMoney.com) -- A stock rally gained momentum Thursday, with the major indexes hitting highs for the day in the last minutes of trade, as concerns over Europe's debt crisis and its impact on the global recovery were calmed by a sharp boost in Chinese exports and a strengthening euro.
The Dow Jones industrial average (INDU) finished up 273 points, or 2.8%. The Dow closed above 10,000 for the first time this week. Shares of Caterpillar (CAT, Fortune 500), Chevron (CVX, Fortune 500) and American Express (AXP, Fortune 500) led the rally, rising about 5%.
The S&P 500 index (SPX) gained 31 points, nearly 3%. That was thanks to a bounce in energy shares that dragged on the market during the previous session. Anadarko Petroleum (APC, Fortune 500) climbed 12.4% and Baker Hughes (BHI, Fortune 500) was up 10.6%.
The Nasdaq composite (COMP) rose 60 points, or 2.8%.
Stocks finished in the red Wednesday, failing to sustain session gains in the last hour of trade, as investors dumped energy stocks amid ongoing worries about BP's ability to weather the costs of the Gulf oil spill.
But the market rebounded Thursday as investors digested a report verifying a nearly 50% surge in Chinese exports in May compared to a year earlier and a stronger euro after European Central Bank President Jean-Claude Trichet said the central bank would maintain its monetary policy.
"Trichet is indicating that the European economy will not falter and will not be problematic to the global economic recovery," said Peter Cardillo, chief market economist at Avalon Partners.
The ECB president's comments helped push the euro to hold above $1.20 for the first time in a week, and as it spiked as high as 1.4% to stand at $1.2142.
"We're seeing the euro stabilize, and while that doesn't mean the crisis is over, there's less fear in the market," Cardillo said. "The easing of that fear is what's responsible for the stampede."
Stocks will likely remain in a tight range as long as the euro maintains its strength and boosts investor confidence, said Fred Dickson, chief market strategist at D.A. Davidson & Co.
As the concerns over Europe's debt crisis continue to subside, Cardillo said investors appetite for risk will resume and the focus will shift to strong U.S. economic data.
Economy: A government report showed that jobless claims fell 3,000 to 456,000 last week. Economists surveyed by Briefing.com expected filings to slide to 450,000. Meanwhile, the number of Americans filing for ongoing unemployment insurance sank by 255,000 to the lowest level since December 2008.
The Commerce Department said the trade deficit increased 0.6% in April, widening to $40.3 billion from a downwardly revised $40.0 billion the previous month. That was lower than the $41.3 billion that analysts surveyed by Briefing.com expected.
The Treasury reported the 20th consecutive monthly deficit, with a $136 billion shortfall in its May budget. Economists were expecting the government's budget to be $142 billion in the red during the month.
Companies: BP (BP) said Thursday, day 52 of the oil spill, that it "is not aware of any reason" for the 16% plunge in its stock price during the previous day's trading. The company's stock rebounded Thursday, rising as much as 13%.
While most bank shares were up with the broader market, Goldman Sachs' (GS, Fortune 500) stock plunged more than 3% to a new 52-week low as investors digested reports that the Securities and Exchange Commission is investigating a mortgage investment Goldman bundled and sold in 2006.
Wall Street reform: A joint committee of lawmakers convened Thursday to begin hammering out differences and merge the financial reform bills passed in both the Senate and House of Representatives.
The Democrats hope a final vote in both chambers will take place before July 4.
"Flash crash" fix: The SEC approved new rules Thursday that will halt trading uniformly across all U.S. markets for stocks experiencing 10% price swings within a five-minute period to prevent a repeat of last month's "flash crash."
The rules could go into effect as early as Friday, the SEC said.
World markets: European markets edged higher. France's CAC 40 finished up nearly 2% while the DAX in Germany climbed 1.3%. Britain's FTSE 100 also posted gains, rising 0.8%.
Stocks in Asia finished mixed. Japan's benchmark Nikkei index jumped 1.1% and the Hang Seng in Hong Kong ended slightly higher. But China's Shanghai composite slipped 0.8%.
Dollar and commodities: The dollar dipped against other major currencies. The greenback sank 1.3% against the euro and the British pound. The buck slipped slightly versus the Japanese yen.
The weaker dollar pushed U.S. light crude oil for July delivery higher for a third straight session. Oil prices rose $1.10, or 1.5%, to settle at $75.48 a barrel.
After climbing to a record high earlier in the week, gold drifted lower for a second session. The precious metal's price dropped $7.70 to settle at $1,220.80 per ounce.
Bonds: Treasury prices plunged Thursday, pushing the benchmark 10-year note's yield up to 3.32% from 3.22% late Wednesday. Bond prices and yields move in opposite directions.
Market breadth: Market breadth was positive. On the New York Stock Exchange, winners beat losers seven to one on volume of 1.3 billion shares. On the Nasdaq, advancers topped decliners 11 to two on volume of 2.1 billion shares.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||4.33%||4.32%|
|15 yr fixed||3.75%||3.73%|
|30 yr refi||4.30%||4.31%|
|15 yr refi||3.71%||3.70%|
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