Overnight Markets: US stocks surge on eurozone deal

US stocks jumped 3% on Thursday, with the Standard & Poor’s 500 Index extending the biggest monthly rally since 1974, as an agreement by European leaders to help contain the region's two-year debt crisis eased investors’ concerns.

The Dow Jones industrial average was up 340 points, or 2.86%, at 12,209. The Standard & Poor's 500 Index was up 43 points, or 3.43%, at 1,285. The Nasdaq Composite Index was up 88 points, or 3.32%, at 2,739.

European heads of state, the International Monetary Fund and bankers sealed a deal that also foresees a recapitalisation of hard-hit European lenders and a leveraging of the bloc's rescue fund to give it firepower of $1.4 trillion. The agreement includes provisions for write-downs on Greek bonds.

Adding to the positive overtone, the government's estimate of third-quarter growth in the US economy expanded at the fastest pace in a year.

Financials were the best performers, with JPMorgan up 8.3% and Citigroup jumping 9.7%.

Materials and energy shares were among the top gainers as the resolution in Europe allayed fears about demand. Crude oil rose 4.3%.

Exxon Mobil gained 1% after the Dow component said profit rose 41% in the third quarter. Dow Chemical’s quarterly profit narrowly missed expectations but the stock rose 8.2%.

Elsewhere, MetLife reported third-quarter earnings that topped analysts' forecasts, sending its shares 2.6% higher. Baidu climbed 8.2% after the bell on the Nasdaq after its results.

On the downside, Avon Products tumbled 18% after it said the US Securities and Exchange Commission is investigating the company’s contacts with financial analysts.

In Asia, equities surged on Friday in afternoon trade as the fastest US economic growth in a year and Europe’s debt deal strengthened the outlook for exporters.

The MSCI Asia Pacific Index rose 1.3% to 125 as of 1:33am in Tokyo. Japan’s Nikkei 225 Stock Average added 1% and South Korea’s Kospi Index advanced 0.5%. Australia’s S&P/ASX 200 was little changed. Hong Kong’s Hang Seng Index climbed 1.9%, headed for an 11% increase this week, its biggest such advance since May 2009.

In company news, Honda Motor rose 3.6% after US household purchases beat estimates. HSBC Holdings Plc advanced 2.8% and Jiangxi Copper increased 2.6% as copper prices this week jumped by the most in at least 25 years.