From The Wall Street Journal:
The Standard & Poor's 500-stock index added 10.67 points, or 0.8%, to 1325.66. All 10 of the index's sectors rose, led by telecommunications. Wal-Mart Stores WMT +3.57% climbed 3.6%, leading the Dow higher, and hit a 12-year intraday high. The Nasdaq Composite advanced 27.40 points, or 1%, to 2858.42.
The gains came amid relatively low volume, with 5.63 billion shares changing hands, the fewest since May 25.
"People today and this week have become more fearful of missing the positive development that will fix Europe's problems than they are about Europe's problems themselves," said Steve Sosnick, equity risk manager at Interactive Brokers LLC's IBKR +0.56% Timber Hill unit.
Reports surfaced that Spain could seek aid from the European Union as early as Saturday. A spokeswoman for the Spanish government quickly refuted that, but a euro-zone official said leaders would discuss potential support for the country's banks Saturday morning. Spain's IBEX 35 rallied 1.8%.
"The problems in Spain are still the same, but if there's a meaningful, coordinated, pan-European policy response, that is a measurable positive," said Stephen Wood, chief market strategist at Russell Investments.
Meanwhile, President Barack Obama said there are specific steps the euro zone can take to solve its debt crisis, such as injecting capital into banks to help stabilize the financial system.
It is surprising the depth of denial within the investing community regarding the seriousness of the banking crisis and sovereign debt crisis in Europe.
One would think that after all the events since 2007 that the public in general, and investors in particular, would be gun shy about more magical political fixes involving sending even more money to banks and taking on that debt by national governments that are already heavily burdened.
Yet, here we are, with a rebound in one of the world's largest stock markets after Bernanke did not promise further immediate QE. The low volume of shares trading hands should be a warning sign. Yes, price is king and trumps all other indicators, but one early warning sign is a decline in volume.
It is my conviction that we will see much higher volatility in the next few weeks.