Dow ends best day since March 2009

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The Dow Jones industrial average had its best day since March 2009 thanks to a quick succession of promising economic reports, including a new effort by central banks to help struggling European economies.

The Dow closed up 490.05 points, or 4.2%, to 12,045.68. It was the largest point and percentage advance since March 23, 2009, when the index shot up 497 points, or 6.8% -- just as the latest bull market was beginning.

Most broader indexes, however, posted their biggest one-day gains since early August, when markets were bouncing wildly from day to day after Standard & Poor’s downgrade of the U.S. government’s credit rating.

The S& P 500 index surged 4.3% to 1,246.96, its best day since it rose 4.6% on Aug. 11. The Nasdaq composite index jumped 4.2% to 2,620.34, its best day since Aug. 23, when it rallied 4.3%.

The gains lifted most indexes back to where they were two weeks ago, before Europe’s worsening debt crisis triggered steep declines.

The Dow is back in the black year to date, up 4%. Most U.S. indexes, however, still are down for the year.

‘There’s just a lot of good news in general,’ said Don Hays, the founder of Hays Advisory.

U.S. stock indexes rose steadily during the last hour of trading, but most of the increases came at the beginning of the day because of news reported before markets opened.

It began last night when China said that it would lower the amount of money that banks have to hold in reserve. This should help stimulate the economy by making banks more willing to lend.

Before U.S. markets opened, the Federal Reserve, the European Central Bank and four other central banks unveiled a new program to increase access to dollars for struggling European banks. The move is designed to make it easier for European banks to access funds at a time when fears about the European debt crisis have led to a freeze in liquidity.

In the United States, the payroll company ADP said just before the markets opened that private-sector companies in the U.S. had added 206,000 employees in November. That is almost 100,000 more than they added in October and nearly 100,000 more than analysts had expected. The figures allay fears that the job market has ground to a halt.

Later in the day, data on business activity, pending home sales and general economic growth all came in better than expected.

‘There were a range of different indicators on different parts of the U.S. economy, and they all did well,’ said Paul Ashworth, an economist with Capital Economics.

Markets rose for the third straight day after more than a week of big declines.

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-- Nathaniel Popper