NEW YORK (
) -- Stocks recovered late in Monday's session after an influential European Central Bank member provided reassurances that the eurozone crisis will eventually be brought under control.
Dow Jones Industrial Average
gained 84 points, or 0.7%, to close at 12,067. The
added 8 points, or 0.6%, to settle at 1261, while the
increased 9 points, or 0.3%, to finish at 2695 amid light volumes.
Stocks rallied after
reported that ECB governing council member Jürgen Stark told an audience at a conference in Lucerne, Switzerland that the eurozone crisis will be brought under control within two years.
For much of the day, stocks were lower on worries that political missteps in Europe's third-largest economy could drive Italy further into debt purgatory. The Dow was down more than 100 points at its lowest point of the session.
A vote on budget reforms in Italy Tuesday will effectively test the leadership of Prime Minister Silvio Berlusconi, who faces pressure to resign from office. The yield on 10-year Italian government debt has jumped since Friday, hitting a 14-year high of 6.67% on Monday and signaling heightened nervousness that political turmoil will prevent Italy from dealing with its debt problems.
"The question is whether Italy will be the next domino to fall," said Paul Nolte, director of investments with Dearborn Partners. "Equity markets are narrowing in on Italy's ability to work out a deal."
Meanwhile, the situation in Greece looked more stable after the country came to an agreement to accept an aid package from its European neighbors that will allow Greece to avoid default in the near term. News that Greek Prime Minister George Papandreou will resign, making way for an interim administration led by a former European Central Bank vice president, gave the markets some clarity about the country's future.
Earlier, London's FTSE lost 0.3% and Germany's DAX fell 0.7%. Japan's Nikkei Average finished down 0.4%, and Hong Kong's Hang Seng lost 0.8%.
In other corporate news,
gained 1.4% after announcing that the bank has reduced its holdings of European sovereign debt by about half since last week. Shares of Jefferies have faced pressure in recent days over concerns that the bank is dangerously exposed to Europe's debt crisis.
American Dental Partners
( ADPI) jumped 79% after agreeing to be taken private by JLL Partners for $398 million. The dental office operator also beat third quarter earnings estimates.
Specialty vehicles provider
soared 30.6% to $5.50 after agreeing to a buyout by combat vehicle manufacturer
for $5.52 a share, or roughly $360 million.
Barnes & Noble
fell 1.9% to $11.39 as the struggling bookseller
unveiled the new Nook Tablet . To protect its bottom line, Barnes & Noble priced its latest e-reader at $249, while slashing the price of its existing Nook Color from $249 to $199.
Gold for December delivery gained further with the weakness in the equities market, up $35 to settle at $1791.10 an ounce. In other commodities, the December crude oil contract rose $1.26 to $95.52 a barrel.
The U.S. economic calendar's sole report was a reading on consumer credit for September at 3 p.m. Consumer credit increased $7.40 billion according to the Fed, greater than the increase of $5 billion that economists were expecting, according to a survey by
The euro slipped 0.2% to $1.38 and the dollar index edged down 0.01%. Ten-year U.S. Treasury notes rose 6/32, diluting the yield to roughly 2%.
The bulk of earnings season has passed with less than 75 companies on the S&P 500 left to report.
-- Written by Chao Deng and Andrea Tse in New York