Wall Street jumps as Europe debt concerns ease

Wall Street bounced more than 2 percent on Wednesday, reversing three days of losses after Germany’s top court smoothed the way for Berlin’s participation in bailouts that could ease Europe’s debt crisis.
But investor caution that there remains a long road to recovery was underscored by light trading and continued high volatility as shown in the CBOE VIX volatility index <.VIX>.
In almost a mirror image of the previous session, financial stocks rebounded sharply, with the KBW Bank Index <.BKX> up nearly 6 percent. Bank of America Corp jumped 7 percent, helped by a management shake-up.
European stocks rallied off a two-year low after the German court rejected lawsuits aimed at blocking the country from joining efforts to aid Greece and other nations. Germany’s DAX <.DAX> index leapt more than 4 percent.
Kevin Caron, market strategist at Stifel, Nicolaus & Co in Florham Park, New Jersey, cautioned that although valuations are more attractive after a 12 percent decline in the S&P 500 index since April, uncertainty over the festering European debt crisis and the path of the U.S. economy will continue to dog Wall Street.