Brendan Mcdermid / Reuters
A trader works on the floor of the New York Stock Exchange.
By msnbc.com news services
U.S. stocks moved sharply higher Monday on hopes that Europe's leaders will agree on a plan to restore long-term confidence in the euro.
The Dow Jones industrial average was up over 150 points in the first few minutes of trading.
A crucial week for the future of the euro kicks off Monday with a meeting of German Chancellor Angela Merkel and French President Nicolas Sarkozy in Paris. The two are expected to discuss how to achieve closer political and economic union of the 17 euro countries, including stricter budgetary oversight.
Merkel wants to change the basic European Union treaty to reflect the tougher rules on euro countries and make them enforceable, while Sarkozy is resisting giving up more powers to Brussels, especially since he faces a tough re-election campaign in April. Sarkozy is thought to prefer an intergovernmental deal between the 17 euro countries.
The markets are hopeful that, given the gravity of the situation afflicting the eurozone, the two leaders will come up with a common proposal for tighter integration on budget matters. Analysts say that such a plan could lead to further emergency aid from the European Central Bank, possibly through the International Monetary Fund.
In Europe, the FTSE 100 index of leading British shares was up 0.5 percent at 5,582 while Germany's DAX rose 0.9 percent to 6,133. The CAC-40 in France was 1.5 percent higher at 3,213.
The biggest gainer was Italy's FTSE MIB, which was trading 3.1 percent higher, a day after the government led by Premier Mario Monti agreed big austerity and growth-boosting measures.
Significantly, the pressure on Italy eased in bond markets. The country's ten-year bond yield was down 0.40 of a percentage point to 6.16 percent.
Italy is the eurozone's third-largest economy and is considered too big to be bailed out. Its borrowing rates have in recent weeks hovered around the 7 percent mark, a level that eventually forced Greece, Ireland and Portugal to seek financial help. By comparison, bond yields in Germany, Europe's largest and most stable economy, are roughly 2 percent.
Investors will be looking ahead to the Institute for Supply Management's November non-manufacturing index, which will be released at 10 a.m. ET. Economists forecast a reading of 53.5 versus 52.9 in October. Last week, the ISM's November manufacturing index rose more than expected.
In addition, October factory orders are seen dropping 0.3 percent after a 0.3 percent rise in September.
The Associated Press and Reuters contributed to this report.
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