OVTI (MM)

Three substantial economic developments announced in quick succession Wednesday morning, including efforts from several central banks to shore up the global financial system, put the Dow Jones Industrial Average on pace for its biggest gain since August.

Central banks around the globe announced a coordinated plan to make dollar funding cheaper for European banks. The announcement came after China indicated it would loosen monetary policy by lowering the reserve requirement ratio for banks. A report on the labor market showed private-business hiring rose by 206,000 in November, the largest monthly gain this year.

The Dow was up 385 points, or 3.3%, to 11941, with less than an hour to go before the closing bell. All but one of the 30 Dow components rose. Caterpillar rose 6.9% and General Electric gained 5.6%, while Home Depot shed 0.5%. The surge propelled the index back into positive territory for the year. The Dow is on pace to close November with a slight monthly gain.

The Standard & Poor's 500-stock index jumped 40 points, or 3.4%, to 1235. Financial, material and industrial stocks were the biggest gainers. The technology-oriented Nasdaq Composite gained 82 points, or 3.3%, to 2598.

"Any time you see cross-broader coordination, it shows that we're all in this together and everyone's trying to solve the problem," said Jack Ablin, chief investment officer at Harris Private Bank. "Policy makers aren't turning their backs on Europe."

The Federal Reserve, the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank agreed to lower the pricing on the existing temporary U.S. dollar liquidity swap arrangements. The move cuts the rate by 0.50 percentage point, with the goal meant to "ease strains in financial markets," according to the Fed.

Financial stocks rallied. Morgan Stanley rose 8.8% and J.P. Morgan Chase gained 7.7%. Bank of America rose 5.1%, while Citigroup increased 7.6%.

While the coordinated central bank effort doesn't address the fundamental problems associated with European government debt, it underscores a "sense of urgency" to address the broad issues ailing the global financial system, said Seth Setrakian, co-head of trading at First New York Securities.

Investors said the focus will soon shift back to Europe and what needs to be done to stem the region's debt problems. Euro-zone finance ministers have acknowledged that the bloc's bailout fund would have less capacity to help troubled nations than once hoped. They have ramped up calls on the European Central Bank and the International Monetary Fund to come to their aid.

European markets jumped. The Stoxx Europe 600 rose 3.6%, while the German DAX gained 5% and the France CAC-40 increased 4.2%.

Gold futures settled at a three-week high at $1,750.30 a troy ounce, while crude-oil prices settled up 57 cents at $100.36 a barrel. The dollar fell against the euro and yen.

The People's Bank of China indicated it was loosening monetary policy after it said the reserve requirement ratio for banks will be lowered by 0.5 percentage point as of Dec. 5. China's central bank previously has raised the reserve requirement ratio six times this year.

Additionally, private-sector jobs in the U.S. rose by 206,000, according to Automatic Data Processing and consultancy Macroeconomic Advisers, which came in well ahead of the 130,000 gain economists had expected. The report is viewed as a preview for the government's jobs report, due on Friday.

Also on the economic calendar, a reading on Chicago-area manufacturing activity in November was better than economists expected. Pending home sales in October rose 10% and hit the highest level of the year.

The Fed also reported the economy grew in most parts of the U.S. in October and the first part of November, suggesting a slow if increasingly steady recovery. In its latest beige book, 11 of the Fed's 12 bank regions reported an increase in economic activity since the previous report. The St. Louis Fed was the only one that reported a decline.

In corporate news, OmniVision Technologies reported fiscal second-quarter earnings fell 27% and the imaging-technology company issued a downbeat forecast for this quarter. Shares fell 4.7%.

Jos. A. Bank Clothiers' fiscal third-quarter income rose 19%, though margins continued to slide. The men's clothing retailer also said this quarter was off to a weaker start than expected. Shares dropped 6.7%.

American Eagle Outfitters' fiscal third-quarter earnings soared 59%, as the clothing retailer geared to teens and young adults saw strong sales growth. Shares rose 2.3%.

-By Steven Russolillo, Dow Jones Newswires; 212-416-2180; steven.russolillo@dowjones.com

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