The optimism pushed the euro up nearly 2% against the dollar. Commodities also joined in the party, with oil and silver prices gaining 3%.

Over the weekend, German Chancellor Angela Merkel and French President Nicolas Sarkozy said they have come up with a plan to get Europe's festering debt problems under control. The plan, which will include recapitalizing European banks, will be presented to world leaders at the G20 meeting in Cannes Nov. 3 and 4.

The Dow Jones industrial average (INDU) gained 329 points, or 2.9%, to close at 11,433. The S& P 500 (SPX) added 39 points, or 3.4%, to 1,195. The Nasdaq composite (COMP) rose 86 points, or 3.5%, 2,566.

All 30 Dow components were higher, and only a handful of S& P 500 companies traded in the red, including Sprint and Netflix.

French banks Credit Agricole, Societe Generale and BNP Paribas finished up between 3% to 7%. Shares of Bank of America (BAC, Fortune 500), Citigroup (C, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Morgan Stanley (MS, Fortune 500), Goldman Sachs (GS, Fortune 500) and Wells Fargo (WFC, Fortune 500) gained between 3% and 7%.

" The Europe debt crisis cloud has been hanging over the market for a year-and-a-half now," said Scott Brown, chief economist at Raymond James. " The risks and worries have been intensifying over the last couple of weeks, but after this weeknd, the market is expecting something big and concrete that will put the crisis behind us."

While talk of a strategy is encouraging, the lack of details is still concerning.

" There is still a healthy bill of skepticism because we've been here before -- many times before," said Michael Hewson, analyst at CMC Markets in London. " All Merkel and Sarkozy have done is reiterated their statements from earlier, and kicked the can down to Cannes."

Meanwhile, troubled Franco-Belgian bank Dexia became the first casualty of the eurozone's money woes. On Monday, the bank accepted a €90 billion joint bailout from France, Belgium and Luxembourg.

Europe's debt crisis: 5 things you need to know

Investors have been quick to react to headlines concerning Europe's debt crisis.

" Dexia passed the stress test earlier this summer with flying colors -- yet here we are now, three months later, and it needs a bailout," said Hewson. " I think that begs the question as to whether Dexia is a special case, or if it's one in a long line of other bailouts.

On Friday, U.S. stocks ended lower as downgrades for Italy, Spain and 12 U.K. financial institutions overshadowed a better-than-expected report on the U.S. job market.

World markets: European stocks finished higher. Britain's FTSE 100 (UKX) added 1.8%, the DAX (DAX) in Germany gained 3%, and France's CAC 40 (CAC40) climbed 2%.

Asian markets ended mixed. The Shanghai Composite (SHCOMP) slipped 0.6%, while the Hang Seng (HSI) in Hong Kong inched higher. Tokyo was closed for holiday.

Currencies and commodities: The dollar lost ground against the British pound and Japanese yen.

Oil for November delivery rose $2.43 to $85.41 a barrel.

Gold futures for December delivery added $35 to $1,670.80 an ounce.

Companies: Sprint's (S, Fortune 500) stock tumbled after six banks downgraded the stock -- the selling followed a 20% slide on Friday. Sprint said it is running out of money and may need to draw down its credit line or raise more capital to fund itself.

Netflix (NFLX) shares turned lower after an initial rally as the company ditched a plan announced last month to spin off its DVD streaming business and rename it Qwikster.

Shares of Yahoo (YHOO, Fortune 500) climbed, as talk about a possible buyout of the struggling company continued to swirl. Following chatter that Microsoft (MSFT, Fortune 500) and Chinese e-commerce giant Alibaba were considering a bid for Yahoo, Reuters reported that the company could also be sold to a private-equity firm.

Dow components Alcoa (AA, Fortune 500) and JPMorgan Chase report quarterly financial results later this week, as well Pepsico (PEP, Fortune 500) and Google (GOOG, Fortune 500). All four heavyweights are among the S& P 500 companies.

Overall earnings for the companies in the S& P 500 are expected to be up 12.6% in the third quarter versus the same period last year, according to analysts at S& P Capital IQ.

Bonds: The bond market is closed for Columbus Day.   

NEW YORK (CNNMoney) -- U.S. stocks were set to open higher Thursday, as investors grew more optimistic that European leaders were moving to strengthen the continent's banks in the face of massive debt problems.

Dow Jones industrial average (INDU), S& P 500 (SPX) and Nasdaq (COMP) futures were all higher ahead of the opening bell. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.

The death of tech luminary Steve Jobs on Wednesday drew attention to Apple (AAPL, Fortune 500), as investors sought to determine what his loss will mean for the tech giant's stock and the company's long-term success.

On Wednesday, U.S. stocks rallied ahead of the close, ending the day higher as investors focused on positive news out of the eurozone.

Talks surrounding a recapitalization of European banks intensified, and German Chancellor Angela Merkel reiterated her country's commitment to moving swiftly to address problems in Greece.

The European Central Bank announced Thursday morning it was holding interest rates steady -- a move that cut into the futures rally in the United States.

Later Thursday, eurozone leaders will hold a press conference and may offer further clues on efforts to contain the region's debt crisis.

Meanwhile, the Bank of England said it was holding interest rates steady at 0.5% and extending its bond-buying program -- news that was welcomed by global markets.

However, any real solution to Europe's debt crisis is still in the distant future.

" Any jump could be short lived, because these measures could just fluff up asset prices rather than solve the underlying issues that are really causing problems for the eurozone," said Manoj Ladwa, a senior trader at ETX Capital.

World markets: European stocks climbed in morning trading. Britain's FTSE 100 (UKX) rose 2.1%, the DAX (DAX) in Germany increased 2.2% and France's CAC 40 (CAC40) added 2.3%.

Asian markets ended higher. The Hang Seng (HSI) in Hong Kong rose 5.7% and Japan's Nikkei (N225) ticked up 1.7%. Shanghai is closed all week for holiday.

Economy: The Labor Department's closely-watched weekly initial jobless claims data comes out at 8:30 a.m. ET. Economists expect unemployment claims to increase to a reading of 402,000 from last week's 391,000 claims.

The most important number of the week is Friday's employment report from the Labor Department. A CNNMoney survey of 22 economists forecasts that the U.S. economy added 65,000 jobs overall, with the unemployment rate expected to remain unchanged at 9.1%.

Companies: Investors will keep a close watch on Apple (AAPL, Fortune 500) shares after the death of Steve Jobs, due to the visionary's outsized role at the company. Shares were slightly lower in premarket trading.

Citing a bank executive, the Wall Street Journal reported that Bank of America's (BAC, Fortune 500) week-long website troubles are due to botches in a technology upgrade.

Currencies and commodities: The dollar fell against the euro, the Japanese yen and the British pound.

Oil for November delivery gained $1.89 to $80.77 a barrel.

Gold futures for December delivery rose $11.00 to $1,652.60 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury dropped, pushing the yield up to 1.90% from 1.89% late Wednesday.  

Dow Jones industrial average (INDU), S& P 500 (SPX) and Nasdaq (COMP) futures were up about 0.8% ahead of the opening bell. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.

Stocks had a rough day Tuesday, opening slightly lower, only to sink sharply following a weak consumer confidence report. But stocks managed to bounce back in the afternoon and eke out modest gains following the latest Fed minutes.

Tuesday's bumpy ride resembles the jerky trading on Wall Street throughout August. A downgrade by Standard & Poor's early in the month acted as the catalyst for two weeks of wild swings as investors feared the U.S. would tip back into a recession. In fact, August is on track to be worst month for stocks in over a year.

The Dow has tumbled almost 5% this month, while the S& P 500 and Nasdaq are off more than 6%.

Fed debated QE3 at August meeting

As concerns about a stalling economic recovery and questions about the Fed's next steps continue to mount, investors will keep a close eye on Thursday's big batch of economic data.

Some analysts say that Tuesday's Fed meeting minutes suggest that the central bank will announce new steps to spur economic growth, even as early as next month when it convenes for a meeting on monetary policy.

" The focus will not be whether there will be a policy response but rather the debate centers around what form -- QE, duration shifts, or a cut in rate received on excess reserves -- and when," said Marc Chandler, global head of currency strategy at Brown Brother Harriman.

He added that the trend in economic data over the next several weeks will drive the the debate among Fed members.

Wall Street will digest two reports on the job market, ahead of Friday's highly-anticipated employment report for August.

The readings from outplacement consulting firm Challenger, Gray & Christmas and from payroll processing firm ADP, are typically an indicator ahead of the government's monthly jobs report.

A CNNMoney survey of 17 economists forecasts that the U.S. economy added 80,000 jobs, and the unemployment rate remained at 9.1% in August.

Reports on factory orders and and regional manufacturing activity are also on tap.

Economy: The number of planned job cuts fell 23% in August, according to outplacement consulting firm Challenger, Gray & Christmas.

Investors will get the ADP private employment report at 8:15 a.m. ET. Economists expect the private sector hired 100,000 fresh workers in August, down from the 114,000 the sector hired in the prior month.

In other economic data, the Commerce Department will release June factory orders data. Economists are looking for factory orders to fall 1%

Companies: Shares of Exxon Mobil (XOM, Fortune 500) edged up 0.4% in premarket trading, after the company announced late Tuesday that it has entered into a partnership with Russian oil giant Rosneft. The deal gives Exxon Mobil access to vast Arctic oil deposits and Rosneft a leg up in cutting-edge oil technology.

Bank of America's (BAC, Fortune 500) stock rose 1.5% after the Wall Street Journal said the bank is selling its correspondent mortgage business, citing unnamed sources familiar with the matter.

Shares of Oracle (ORCL, Fortune 500) edged down 0.3% after a separate report from the Journal said that U.S. government authorities from the Justice Department, the Federal Bureau of Investigations and the Securities and Exchange Commission are investigating the software giant's business practices in Africa.

World markets: European stocks were modestly higher in morning trading. Britain's FTSE (FTSE) 100 gained 1%, the DAX (DAX) in Germany added 1.3%and France's CAC (CAC) 40 increased 1.6%

Asian markets ended the session ended higher. The Shanghai Composite (SHCOMP) and Japan's Nikkei (N225) were only slightly higher, while the Hang Seng (HSI) in Hong Kong spiked 1.6%.

Currencies and commodities: The dollar edged higher against the euro, and the British pound, but the greenback was lower versus the Japanese yen.

Oil for October delivery slipped 91 cents to $87.99 a barrel.

Gold futures for December delivery fell $2 to $1,827.80 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury rose slightly, pushing the yield down to 2.17% from 2.18% late Tuesday.

Stocks had a rough day, opening slightly lower, only to sink sharply following a weak consumer confidence report. But the knee jerk reaction was short lived, and stocks bounced back into positive territory before settling into a malaise for much of the day.

All indices closed the day in positive territory, but still remained down for the year. The Dow Jones industrial average (INDU) moved up 20 points, or 0.2%, to 11,559.95.

Financial stocks remained under pressure, with Bank of America (BAC, Fortune 500) and JPMorgan Chase (JPM, Fortune 500) down between 1% to 3.5%.

The S& P 500 (SPX) rose 3 points, or 0.2% to 1212.92 while the Nasdaq (COMP) added 14 points, or 0.6% to 2576.11. Research in Motion (RIMM), Baidu (BIDU), and Netflix (NFLX) were among the biggest winners on the tech-heavy index.

Stocks got a bit of a late-day bounce from the release of the Federal Reserve minutes. The minutes revealed that some committee members advocated another round of Treasury purchases to jumpstart the economy, known as quantitative easing or QE3. Despite a low volume trading day, investors who had been sitting on the sidelines with cash opted to buy in after the minutes were released.

Still equity markets didn't make much headway as fears of another recession muted investors' optimism.

Bank of America still not out of the woods

" Fear of a recession can become a self-fulfilling prophecy," said Joseph Tanious, vice president and market strategist at J.P. Morgan Funds. " Consumers are clearly experiencing a crisis of confidence, and this morning's numbers only reinforce that view."

Early Tuesday morning, investors were spooked by a report that showed consumer confidence sunk to its lowest level in more than two years, but the knee-jerk reaction quickly faded.

" It's not surprising that people are saying they're more worried about the economy now," says Kate Warne, chief market strategist at Edward Jones. " It's less certain that it translates into a dramatic change in behavior. Even when consumers become more cautious, they don't always spend less."

Still Tanious says that investors were able to shrug off the low confidence numbers because of a few bright spots in economic data including consumer spending numbers on Monday that were better than expected.

Surprising six-figure salaries

Stocks have had a rough month. A downgrade by Standard & Poor's in early August acted as the catalyst for two weeks of wild swings as investors feared the U.S. would tip back into a recession. In fact, August is on track to be worst month for stocks since May 2010.

On Monday, U.S. stocks rallied following a trifecta of positive news: a Greek bank deal, a solid U.S. consumer spending report, and relief that Hurricane Irene caused less damage than expected.

Economy: Home prices rose 3.6% during the second quarter, according to the Case-Shiller 20-city home price index. That was the first quarterly increase in prices in a year.

But home prices are still down 5.9% from a year earlier. Economists were expecting a year-over-year decline of 4.7%.

Companies: Shares of Dollar General (DG, Fortune 500) ended the day up 6%, after the retailer beat second-quarter earnings and sales estimates. The retail company lifted its same-store sales guidance for the remainder of the year. During the second quarter, investing guru Warren Buffett added a $50.8 million stake in Dollar General.

Shares of Barnes & Noble (BKS, Fortune 500) closed teh day up 16% after the bookseller reported a quarterly loss and sales that fell short of expectatons but investors appeared to focus on strong demand for the retailer's Nook tablet.

Currencies and commodities: The dollar gained ground against the euro and British pound, but fell versus the Japanese yen.

Oil for October delivery jumped $1.50, or 1.7% to $88.50 a barrel.

Gold for December delivery rose $41, or 2.3% to $1,832 an ounce.

Pimco's bad bond bet

Bonds: The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 2.18% from 2.27% late Monday.

World markets: European stocks ended the day with mixed results. Britain's FTSE (UKX) 100 rose 4%, and France's CAC 40 (CAC40) added 0.2%, while the DAX (DAX) in Germany fell 0.5% .

Asian markets ended the session mixed. The Shanghai Composite (SHCOMP) fell 0.4%, while the Hang Seng in Hong Kong (HSI) climbed 1.7% and Japan's Nikkei (N225) rose 1.2%. 

The pullback -- which briefly sent the Dow down nearly 190 points on Tuesday afternoon -- came after three straight sessions of healthy gains.

At the market close, the Dow Jones industrial average (INDU) was down 77 points, or 0.7%. The S& P 500 (SPX) lost 12 points, or 1%, and the Nasdaq composite (COMP) dropped 32 points, or 1.2%.

German Chancellor Angela Merkel and French President Nicolas Sarkozy met to discuss measures announced last month to contain the sovereign debt crisis and protect the euro.

Investors were particularly disappointed that Sarkozy and Merkel said the size of the 440 billion euro stability fund is sufficient, despite economists' push to greatly expand the bailout fund. Some are even calling for funding of more than 1 trillion euro.

The leaders also agreed that issuing eurobonds, a collective bond to help pay off the debt of the peripheral countries, will not solve the European debt crisis.

" The market was pinning its hopes for possible solutions on the outcome of a meeting today between French and German government leaders," said Scott Marcouiller, chief technical market strategist at Wells Fargo Advisors. " The outcome of the meeting was clearly not what the markets wanted."

The leaders also proposed a financial transaction tax, which sent shares of exchange operators NYSE Euronext (NYX, Fortune 500) and NASDAQ OMX Group (NDAQ) down by 8% and 3%, respectively.

Euro bonds: Magic bullet for debt crisis?

Jillian Miller, an analyst at BMO Capital Markets, said those drops were perhaps a bit premature, since all 27 eurozone countries would have to approve the tax, and there appears to be no consensus on the issue.

Before trimming earlier losses to trade flat ahead of the European leaders' press conference, U.S. stocks were under pressure as nearly stagnant economic growth in Europe stoked fears of a regional and global slowdown.

" The focus is back on Europe and its debt problems," said Dave Hinnenkamp, CEO at KDV Wealth Management. " The eurozone economy has some problems, which is an important concern for the global economy."

Lackluster economic growth in Germany, Europe's largest economy, weighed on the broader region's economy. Gross domestic product for the eurozone, which is made up of the 17 nations that use the euro, grew by a tepid 0.2% from the prior quarter -- and by 1.7% on an annual basis.

The quarterly pace of economic growth was the slowest since the end of the recession. The decline in output intensifies concerns about the future viability of the 12-year old currency union.

European economy hits a wall

The long-running debt crises in Greece, Portugal and Ireland accelerated in the second quarter, and investors are also worried that Europe's larger economies -- including Spain and Italy -- may need to be bailed out.

" The data confirm that the region's core economies are in no position to support the periphery, adding to the already significant risk of an eventual eurozone break-up," said Jennifer McKeown, senior European economist at Capital Economics, in a note to clients.

With the focus on Europe, investors largely shrugged off Fitch Ratings' affirmation of the AAA credit rating and " stable" outlook for the U.S.

Earlier this month, Standard and Poor's downgraded the nation's credit rating to AA+. And while Moody's maintained the sterling AAA credit rating, the agency lowered its outlook on U.S. debt to " negative."

On Monday, U.S. stocks moved solidly higher with major indexes rising about 2%, as merger activity -- particularly Google's (GOOG, Fortune 500) bid for Motorola Mobility (MMI) -- set a positive tone on Wall Street.

Economy: The government reported import prices for July rose 0.2%, excluding oil, after a 0.1% decline in the prior month. Excluding agriculture, exports increased by 0.2%. The data followed a 0.1% increase in June.

Housing starts fell 1.5% in July to an annual rate of 604,000, while permits to build new homes slumped 3.2%. Both reports came in worse than expected.

The Federal Reserve said that industrial production rose 0.9% in July, while capacity utilization climbed to 77.5% last month. Both readings came in slightly above economists' expectations.

Companies: Second-quarter results continued to roll in Tuesday.

Shares of Home Depot (HD, Fortune 500) rose 5%, after the home improvement retailer beat earnings and sales expectations and lifted its outlook for the year.

Wal-Mart (WMT, Fortune 500) raised its full-year profit forecast as second-quarter earnings topped estimates by a penny, and sales rose 5.5% to $108.6 billion. The stock jumped 4%.

The two retailers were the biggest gainers on the Dow and S& P 500.

Shares of Urban Outfitters (URBN) dropped 6%, dragging on the S& P 500 and Nasdaq. While the hip retailer posted second-quarter earnings and sales ahead of expectations, the company's CEO warned of disappointing sales in August.

Dell (DELL, Fortune 500) reported earnings per share of 54 cents on revenue of $15.7 billion after the market close. The company hit on earnings, but missed on sales and its guidance looked weak, sending shares down 5% in afterhours trading.

World markets: European stocks trimmed deeper losses from earlier in the day and finished mixed. Britain's FTSE (FTSE) 100 rose 0.1%, Germany's DAX (DAX) fell 0.5% and France's CAC (CAC) 40 fell 0.3%.

Asian markets ended mixed. The Shanghai Composite dropped 0.7% and the Hang Seng in Hong Kong fell 0.2%, while Japan's Nikkei added 0.2%.

Currencies and commodities: The dollar was higher against the euro, but lost ground versus the British pound and the Japanese yen.

Oil for September delivery slipped $1.23 to $86.65 a barrel.

Gold futures for December delivery rose $27 to $1,785 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 2.23% from 2.28% late Monday.

The Dow Jones industrial average (INDU) rose 214 points, or 1.9%, to end at 11,482.90. The S& P 500 (SPX) added 26 points, or 2.2% and the Nasdaq (COMP) gained 47 points, or 1.9%.

The return of " Merger Monday" boosted investor sentiment. Google agreed to buy Motorola Mobility for $12.5 billion, the two companies said Monday.

Shares of Motorola Mobility (MMI) surged 56%, leading the gains on the S& P 500. The merger also helped boost shares of BlackBerry maker Research in Motion (RIMM) as well as Nokia Corp (NOK).

Bank of America's (BAC, Fortune 500) stock spiked 7.9% after the bank said it is selling its credit card business in Canada to TD Bank Group for $8.6 billion, and is exiting its credit card businesses in the U.K. and Ireland.

Shares of offshore drilling contractor Transocean (RIG) rose 3% after it announced plans to buy Norway's Aker Drilling for $1.4 billion.

" Companies have been hoarding cash since 2008 due to the uncertainty of the economic climate, so the fact that they're putting that cash to work is a huge positive," said Peter Tuz, president of Chase Investment Counsel. " It shows that managements are optimistic."

Stocks ended one of the biggest roller-coaster weeks ever on a relatively quiet note Friday, with the Dow climbing 126 points to post its second gain in a row. Earlier last week, the indexes swung wildly between gains and losses of 4% to 5% a day.

But on Monday, Wall Street's key measure of volatility slipped. The CBOE Volatility index, or the VIX (VIX), fell about 12.5% to 31.8. A VIX reading higher than 30 is considered a sign that investors are getting worried -- but Monday's reading was much lower than last week's levels.

Computers rule Wall Street

The market turmoil was sparked by fear among investors that Europe is heading toward a financial catastrophe, and that the U.S. is slipping into another recession.

While those fears haven't completely disappeared, investors are seeking bargains in stocks following three weeks of losses, said Scott Marcouiller, chief technical market strategist at Wells Fargo Advisors.

Companies: Second-quarter results for home improvement chain Lowe's (LOW, Fortune 500) fell short of expectations. The company also trimmed its forecast for the year. Lowe's shares slipped 1.6% earlier in the session, but recovered to rise 0.9% by the end of the day.

After the bell, retailer Urban Outfitters (URBN) reported second-quarter earnings that topped Wall Street estimates. Shares gained nearly 6% in after hours trading.

World markets: European stocks finished with modest gains. Britain's FTSE (FTSE) 100 rose 0.6%, Germany's DAX (DAX) added 0.4% and France's CAC (CAC) 40 edged up 0.8%.

Investors welcomed news Monday morning that the Japanese economy contracted during the second quarter by much less than economists were expecting, following the devastating earthquake that hit in March.

Japan's gross domestic product shrunk by 0.3% last quarter, or 1.3% on an annualized basis.

Asian markets ended with solid gains. The Shanghai Composite rose 1.3%, the Hang Seng in Hong Kong jumped 3.3.% and Japan's Nikkei climbed 1.4%.

Economy: The positive news about mergers and Japan's economy helped offset a disappointing report on regional manufacturing activity.

The Empire State manufacturing index showed that factory activity contracted for a third straight month in August. The figure fell to minus 7.72 from minus 3.76 the prior month. The reading was worse than the minus 0.4 economists surveyed by Briefing.com were expecting.

Currencies and commodities: The dollar was lower against the euro and the British pound, but it advanced slightly versus the Japanese yen.

Oil for September delivery rose $2.50 to settle at $87.88 a barrel.

Gold futures for December delivery added $15.40 to settle at $1,758 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell slightly, pushing the yield up to 2.28%. 

The Dow Jones industrial average (INDU) rallied 430 points, or 4%. The S& P 500 (SPX) added 53 points, or 4.7% and the Nasdaq (COMP) gained 125 points, or 5.3%.

Immediately following the Fed's statement, the major indexes all briefly slid into the red -- with the Dow dropping more than 200 points. The Dow fluctuated by more than 600 points during Tuesday's session.

In its latest monetary policy statement, the Federal Reserve left key interest rates unchanged, saying that deterioration in the labor market and slower-than-expected economic growth will require the central bank to keep rates " exceptionally low" until the middle of 2013.

Read the Fed statement

A survey of investors conducted by investment firm Nomura before the Fed's statement showed that 22% of market participants had been looking for the Fed to announce more quantitative easing to help prop up the economy.

" It's hard to know what this means and how we should react," said Stephen Leeb, president of Leeb Capital Management. " It's disappointing they didn't announce further Treasury repurchases, but they did announce that rates will stay low for two years -- which is a big deal."

Knowing that rates will stay low for at least two years adds certainty to an otherwise uncertain economic environment, said Leeb.

" It means business owners can hire employees, and people can take out mortgages without having to worry about a spike in short-term interest rates," he said.

U.S. stocks have fallen more than 10% in the last month, and Monday's beating was by far the most brutal session. Stocks posted their worst losses since the 2008 financial crisis Monday, in the aftermath of S& P's downgrade of the U.S. credit rating.

Stocks at 'fire sale' prices after bloodbath

So given those sharp declines, it was almost inevitable that markets would ultimately end higher Tuesday, said Sal Arnuk, co-founder of Themis Trading. Since 1927, there have been 31 one-day declines like the 7% drop in the S& P 500 seen Monday, he said. And of those instances, the S& P turned positive the next day 79% of the time.

But that doesn't mean investors aren't still rattled by the struggling U.S. economy and the European debt crisis.

" I've still got my helmet on," Lee Smith, vice president of Cozad Asset Management said. " The sell-off yesterday was overdone, so I'm starting to dip one foot back in the market -- but confidence is so weak right now, I don't have both feet back in yet."

All three major indices sank between 5% and 7% Monday, pushing the Dow below 11,000 for the first time since last November. The sell-off, which amounted to a paper loss of about $1 trillion, was worse than the 512-point drop stocks experienced just three trading sessions before.

Big movers: Bank stocks were among the hardest hit during Monday's slide -- with Bank of America shares tumbling 20%, after AIG (AIG, Fortune 500) said it is suing the bank for billions of dollars over mortgage security fraud.

Banks are bad, but it's not 2008

But Bank of America's (BAC, Fortune 500) stock recouped most of those losses Tuesday, with shares closing 17% higher. Other financial stocks such as JPMorgan Chase (JPM, Fortune 500) andAmerican Express (AXP, Fortune 500) rebounded about 7%, and Citigroup (C, Fortune 500) soared more than 14%.

Gains spilled over to the broader market, with all 30 of the Dow's components ending in the green. Boeing (BA, Fortune 500) and Alcoa (AA, Fortune 500) were among the biggest winners Tuesday -- both rising more than 6%.

Currencies and commodities: The dollar was lower against the euro and Japanese yen, but rose versus the British pound.

Oil for September delivery slid $2.01 to settle at $79.30 a barrel.

Gold futures for December delivery gained $29.80 to settle at $1,743 an ounce. Earlier, gold prices hit a record intraday high of $1,782.50 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury rose following the Fed's statement, pushing the yield down to 2.18% from 2.34% late Monday.

The U.S. Treasury Department plans to sell $72 billion in bonds this week. Its first auction was held Tuesday, during which the government sold $32 billion in 3-year notes. The bid-to-cover ratio, a measure of demand, came in roughly in line with other recent 3-year note auctions -- an indication that investors are not afraid to stash their money in Treasuries, even with the warning from S& P.

World markets: European markets finished mixed. Britain's FTSE (FTSE) 100 gained 1.9% and France's CAC (CAC) 40 jumped 1.6%, while the DAX (DAX) in Germany dipped 0.1%.

Asian markets were also volatile, but ended in the red. Japan's Nikkei dropped 1.7%, but was well off its lows at the close. A late sell-off pushed the Hang Seng in Hong Kong down 5.7%, and the Shanghai Composite was just below breakeven.

Economy: Productivity of U.S. workers slipped 0.3% during the second quarter, after falling 0.6% the prior quarter. Labor costs rose by 2.2%.

Companies: AOL (AOL) reported a bigger-than-expected quarterly loss early Tuesday -- driving shares of the media giant 11% lower.

After the closing bell, Dow component Walt Disney (DIS, Fortune 500) will head to the earnings stage. The media giant is expected to report a profit of 73 cents a share.  

NEW YORK (CNNMoney) -- U.S. stocks gained at the start of trading Tuesday, looking to rebound from the nosedive in the previous session, as investors awaited the Federal Reserve's latest statement on monetary policy.

The Dow Jones industrial average (INDU) gained 107 points, or 1%, the S& P 500 (SPX) ticked up 12 points, or 1.1%, and the Nasdaq (COMP) rallied 35 points, or 1.5%.

But given the recent swings in the market, investors could be in for another day of choppy trading.

U.S. stocks have fallen 15% during the past two weeks, and Monday's beating was the most brutal thus far. Stocks posted their worst losses since the 2008 financial crisis -- amounting to a paper loss of about $1 trillion, in the aftermath of S& P's downgrade of the U.S. credit rating.

All three major indexes sank between 5% and 7%, pushing the Dow below 11,000 for the first time since last November. The sell-off was worse than the 512-point drop stocks experienced only three trading sessions before.

Bank stocks were among the hardest hit during Monday's slide -- with Bank of America shares tumbling 20%, after AIG (AIG, Fortune 500) said it is suing the bank for billions of dollars over mortgage security fraud.

But Bank of America's (BAC, Fortune 500) stock looked to recoup some of those losses, with shares up 8% at the market open Tuesday.

All eyes will be on the Federal Reserve when it releases its monetary policy statement at 2:15 p.m. ET on Tuesday. Investors will likely pour over the central bank's announcement for hints that the Fed will take steps to stabilize markets, and revitalize the slowing economic recovery to avoid a double-dip recession.

The announcement " may bring short term relief after the Lehman-style indiscriminate selling of the past week," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman.

U.S. Treasuries are still safe! Sorta

While he doesn't believe the Fed will launch a third round of Treasury buying -- or QE3 -- at Tuesday's meeting, Chandler said the central bank " will have to respond to evidence of a slowing U.S. economy."

For example, he said Chairman Ben Bernanke and Fed policymakers will likely try to reassure investors about their pledge to maintain low interest rates for a " extended period," with more explicit language perhaps by setting a defined period.

World markets: European markets were mixed in afternoon trading, seesawing between slight gains and sharp losses. Britain's FTSE (FTSE) 100 gained 0.5%, France's CAC (CAC) 40 rose 0.3%, and the DAX (DAX) in Germany fell 0.4%.

Asian markets were also volatile, but ended in the red. Japan's Nikkei dropped 1.7%, but was well off its lows at the close. A late sell-off pushed the Hang Seng in Hong Kong down 5.7%, and the Shanghai Composite was just below breakeven.

Currencies and commodities: The dollar was lower against the euro, the British pound, Japanese yen and the Swiss franc.

Oil for September delivery edged down 17 cents to $81.14 a barrel.

Gold futures for December delivery gained $34 to $1,747.20 an ounce. Earlier, gold prices hit a record intraday high of $1,782.50 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 2.39% from 2.34% late Monday.

Economy: Productivity of U.S. workers slipped 0.3% during the second quarter, after falling 0.6% the prior quarter. Labor costs rose by 2.2%.

Companies: After the closing bell, Dow component Walt Disney (DIS, Fortune 500) will head to the earnings stage. The media giant is expected to report a profit of 73 cents a share.  

NEW YORK (CNNMoney) -- It was a wild ride on Wall Street.

Stocks ended Friday on a mixed note after violently whipsawing throughout the day. The Dow had a massive trading range of 400 points as investors scrambled to make sense of a whirlwind of news.

Deep investor concerns about the U.S. economy and the European debt crisis caused heavy damage to U.S. stocks this week. All three indexes had their worst week since the darkest months of the 2008-09 financial crisis.

The Dow Jones industrial average (DJIA) rose 61 points, or 0.5%, to close at 11,445. The Dow at one point was down nearly 240 points.

The blue chips were lifted by shares of Kraft (KFT, Fortune 500) and Procter & Gamble (PG, Fortune 500), while the biggest drag on the Dow were shares of Bank of America (BAC, Fortune 500), which fell more than 7%.

The S& P 500 (INX) fell less than a point, or 0.1% to 1,199 and the Nasdaq Composite (COMP) slid 24 points, or 1%, to 2,532.

The Dow fell nearly 6% for the week, the S& P 500 lost 7% and the Nasdaq dropped 8%. It was the worst week for the S& P 500 and Nasdaq on a percentage basis since November 2008 and the worst week for the Dow since March 2009.

Stocks started Friday's session sharply higher after investors got a strong U.S. jobs report. But the rally had little fuel, with the major indexes turning sharply lower as fears about Europe's escalating debt problems quickly dampened any early enthusiasm.

" The jobs report was modestly reassuring," said Bruce McCain, chief market strategist with Key Private Bank. " But it's been the heightened concerns over Europe that has dominated trading today."

Italy is quickly becoming the latest domino to potentially fall in the eurozone, with many investors worrying that the eurozone's third-largest economy may be too large to save.

Young investors stay put amid turmoil

Stocks found some support after the European Central Bank said it agreed to buy Italian bonds in exchange for massive budget cuts. But traders said investors were reluctant to hold stocks going into the weekend.

" The crisis in Europe is continuing to unfold and while I suspect Europe's debt story will not have a good ending, it's not clear how many more chapters this book has," McCain said.

It's clear that fear is still dominating sentiment. Wall Street's " fear" gauge -- the VIX (VIX) -- jumped to a reading of 32.05 in late-afternoon trading. Anything above 30 indicates a heightened sense of fear.

Choppy waters ahead - StockTwits

Stocks plunged Thursday, with the Dow tumbling 512 points. It was the steepest point loss since October 2008 -- as fear about the global economy spooked investors.

All three major indexes have erased their gains for the year and now are deep into " correction" territory -- defined as a 10% drop from recent highs. And while Wall Street took a hammering the past few weeks, stocks remain well above their March 2009 lows.

World markets: European stocks sank yet again on Friday before Italy's debt deal was announced. Britain's FTSE 100 (UKX) fell 2.7%, the DAX (DAX) in Germany slipped 2.7%, while France's CAC 40 (CAC40) was down 1.3%.

Asian markets ended the session deep in the red follow Thursday's big selloff in U.S. The Shanghai Composite (SHCOMP) lost 2.2%, the Hang Seng (HSI) in Hong Kong plunged 4.3% and Japan's Nikkei (N225) lost 3.7%.

Commodities and currencies: The dollar rose against the euro, the Japanese yen and British pound.

The greenback also rose for a third straight session against the Swiss franc, following the Swiss National Bank's intervention in the currency market earlier this week.

Gold futures for December delivery gained $3 .to $1,662.60 an ounce Friday, while oil for September delivery added 25 cents to $86.88 a barrel.

Regaining faith in U.S. but not the economy

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 2.56% from 2.46% late Thursday.

Companies: Shares of Procter & Gamble (PG, Fortune 500) rose 2%, after the Dow component posted earnings and sales that were ahead of expectations. The company also warned that results for the current quarter would fall short of estimates.

Priceline.com (PCLN) shares jumped 9%, following the online travel site's better-than-expected earnings and a strong outlook for the rest of the year. 

The Dow Jones industrial average (INDU) fell 80 points, or 0.6%, to 12,109. The S& P 500 (SPX) lost 8 points, or 0.6%, to 1,287. The Nasdaq Composite (COMP) tumbled 18 points, or 0.7%, to 2,669.

Stocks had drifted between small gains and losses throughout the day before the selling picked up steam in the final hour of trading.

Shares of Boeing (BA, Fortune 500) fell 2.5%, making it the worst performer on the Dow. But the selling was broad based, with only three stocks in the blue-chip index ending in the black.

In a widely expected move, the Fed held its benchmark interest rate near zero percent, saying the economic recovery has been weaker than expected.

Echoing past statements, the Fed said economic growth remains tepid enough to justify " exceptionally low" interest rates for an " extended period" of time.

" There was was no 'new news' in the Fed's statement today," said Nigel Gault, an economist IHS Global Insight.

How conservative bulls can use options - StockTwits

The central bank also repeated that its $600 billion stimulus program will end next week, as scheduled. It will continue to use interest earned on its $2.6 trillion portfolio of securities to buy long-term Treasuries.

In his post-statement press conference, Bernanke said the recent economic slowdown is largely due to temporary factors such as supply disruptions from the earthquake in Japan.

But he acknowledged that more long-term problems may be behind the sluggish growth this year.

" We don't have a precise read on why this slower pace of growth is persisting," Bernanke said.

Given the uncertain outlook, Bernanke said the Fed will not act for " at least" another two or three meetings, suggesting that rates will remain low until November.

" It depends on how the economy and economic outlook changes," he added.

Separately, the Fed issued an update to its economic projections. The bankers lowered their target for economic growth and raised their forecast for the unemployment rate.

" Overall, the tenor of today's policy statement and Bernanke's words would best be described as mixed and uncertain," said Guy LeBas, a strategist at Janney Capital Markets. " The markets' response was similarly mixed."

Stocks rose Tuesday, ahead of a key confidence vote in Greece, that boosted the likelihood that the country will be able to secure a bailout package and avert a default.

Companies: FedEx (FDX, Fortune 500) reported earnings and sales that topped forecasts, and hiked its outlook. That sent shares of the shipping company up 3%. Shares of rival UPS (UPS, Fortune 500) edged up nearly 1%.

Shares of Adobe Systems (ADBE) slumped more than 6%. The software maker posted a 54% jump in second-quarter profit after the market close Tuesday, but issued a revenue outlook that fell short of expectations.

Carmax (KMX, Fortune 500) reported first-quarter earnings that widely beat expectations, sending shares of the company 7.5% higher.

Royal Phillips Electronics (PHG) warned that second-quarter profit would drop sharply and miss expectations. U.S.-listed shares of the electronics maker tumbled 10%.

Bed Bath & Beyond (BBBY, Fortune 500) will report quarterly results after the market close Wednesday. The home decor retailer is expected to report earnings of 62 cents a share.

Video streaming website Hulu LLC is considering putting itself up for sale, according to news reports that cite people familiar with the situation.

Greece? The Fed? Earnings are the real story

World markets: European stocks lost ground. France's CAC 40 dropped and the DAX in Germany both lost 0.1% and Britain's FTSE 100 was little changed.

Asian markets ended higher. The Shanghai Composite inched up 0.1%, while the Hang Seng in Hong Kong ended barely above breakeven, and Japan's Nikkei jumped 1.8%.

Currencies and commodities: The dollar gained against the British pound, but edged lower versus the euro and Japanese yen.

Oil for August delivery gained $1.24, or 1.3%, to $95.41 a barrel.

Motorist group AAA released a forecast saying more Americans are staying home for the 4th of July weekend compared to last year -- with 39 million Americans expected to travel 50 miles or more from home between Thursday, June 30 and Monday, July 4. That's down 2.5% from last year, when 40 million Americans celebrated the long weekend away from home.

Gold futures for August delivery added $8 to $1,554.40 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury held steady, with the yield unchanged from Tuesday at 2.99%.   

After slipping about 0.3% in the opening minutes, the major indexes turned higher, with the Dow Jones industrial average closing (INDU) up 76 points, or 0.6%.

Financial stocks JPMorgan Chase (JPM, Fortune 500) and Bank of America (BAC, Fortune 500) were the biggest laggards, while DuPont (DD, Fortune 500) and Caterpillar (CAT, Fortune 500) led the gains.

The S& P 500 (SPX) rose 7 points, or 0.5%, and the Nasdaq composite (COMP) rose 13 points, or 0.5%. Biogen Idec (BIIB, Fortune 500) was the best performer on both indexes, with shares rising more than 4%.

The gains were limited as investors grappled with the latest news on the Greek debt crisis. European finance ministers said Monday that the country won't receive fresh loans until mid-July.

" All eyes are on the Greek debt situation and whether more help is on the way," said Sameer Samana, an analyst at Wells Fargo Advisors. He said ongoing developments in Greece will likely continue to drive market action, as investors wait for the debt-ridden country to pass more austerity measures.

White House spokesman Jay Carney said Monday that the Obama administration believes that Greece's debt situation can be resolved with Europe's help, but " it does create a headwind."

For Greece: Promise of more money - and pain

Greek debt woes have been pressuring stock markets around the world in recent weeks, as investors worry that the country will default on its debt and the crisis will spread to other countries. The Dow and S& P 500 are down about 6% since the start of May, while the tech-heavy Nasdaq has lost nearly 9%.

Adding fuel to the fire, credit agency Moody's said Friday that it was putting Italy on watch for a possible credit rating downgrade.

Despite Moody's warning, the Dow managed to break its six-week losing streak last week.

Companies: Ford Motor Co. (F, Fortune 500) plans to invest $1 billion to revamp its struggling Lincoln brand, the Wall Street Journal reported Sunday, citing dealers briefed on the plan. Shares of the automaker rose 1.3%.

PNC Financial Services Group (PNC, Fortune 500) said early Monday that it will buy the U.S. retail banking division of Royal Bank of Canada (RY) for $3.45 billion. Shares of PNC were down 2%, while share of Royal Bank edged up 0.2%.

Shares of land driller Nabors Industries (NBR) fell 1.8%, after the company trimmed its second-quarter outlook.

Chinese social networking site Renren (RENN) is slated to report results after the market close. Shares of Renren, which went public last month, rose 8%. The stock has declined 50% from its IPO price.

Europe's sickly banks

World markets: European stocks finished slightly lower. Britain's FTSE 100 slumped 0.1%, the DAX in Germany slipped 0.2% and France's CAC 40 dropped 0.6%.

Asian markets ended the session mixed. The Shanghai Composite lost 0.8%, the Hang Seng in Hong Kong slipped 0.4% and Japan's Nikkei ended just above breakeven.

Currencies and commodities: The dollar was flat versus the euro and the British pound, and gained slightly against the Japanese yen.

Oil for July delivery rose 16 cents, or 0.2%, to settle at $93.26 a barrel, following steep losses from the previous week.

Gold futures for August delivery gained $2.90 to settle at $1,542.00 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 2.96% from 2.94% late Friday.