By Chuck Mikolajczak
The euro zone aims to leverage its 440 billion euro bailout fund "several fold," but details are not expected until November, according to a draft statement obtained by Reuters.
Stocks increased gains in the afternoon as the news emerged, continuing the market's recent rally. The S&P has risen 9.5 percent for the month on growing optimism for a deal to address sovereign debt and bank balance sheets in Europe.
"The market has begun to discount any meaningful announcement coming from today's meeting -- that should be helpful for the markets as the bar is set pretty low," said Joseph Tanious, market strategist at J.P. Morgan Funds in New York.
The Dow Jones industrial average <.DJI> gained 162.42 points, or 1.39 percent, to 11,869.04. The Standard & Poor's 500 Index <.SPX><.INX> rose 12.94 points, or 1.05 percent, to 1,241.99. The Nasdaq Composite Index <.IXIC> added 12.25 points, or 0.46 percent, to 2,650.67.
Financials were among the best performers with JPMorgan Chase & Co <JPM.N> up 2.1 percent to $34.18 and U.S. Bancorp <USB.N> up 2.6 percent to $25.48. The KBW Bank index <.BKX> advanced 2.1 percent.
Tanious said details still need to be worked out, including the extent of recapitalization of the banks, clarity on how the European Financial Stability Facility, or EFSF, was to be leveraged and what to do about Greece's overhang of debt.
Gains were curbed on the Nasdaq as Amazon.com Inc <AMZN.O> slumped 12.7 percent to $198.401 a day after forecasting a disappointing outlook for the current quarter on costs related to Kindle and other investments.
On the Dow, Boeing Co <BA.N> rose 4.5 percent to $66.56 as the top boost to the index after raising its outlook.
Economic data showed demand for a range of long-lasting U.S.-made goods rising at the fastest pace in six months in September and new homes sales for the same period the strongest in five months.
Volume was solid with about 8.54 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, above the daily average of 8.01 billion.
Advancing stocks outnumbered declining ones on the NYSE by 2,404 to 598, while on the Nasdaq, advancers beat decliners 1,817 to 675.
(Editing by Kenneth Barry)