TOPICS > Economy

News Wrap: European Markets Notch Biggest Gains in 16 Months

September 27, 2011 at 12:00 AM EDT

HARI SREENIVASAN: Despite doubts about the national recovery, the mood on Wall Street was decidedly upbeat again today. The Dow Jones industrial average gained nearly 147 points to close at 11,190. The Nasdaq rose 30 points to close near 2,547.

European markets also scored their biggest gains in 16 months. Investors took heart as leaders from Germany to Greece to Britain insisted they’re working to resolve the debt crisis.

In Berlin, German Chancellor Angela Merkel said her government will do whatever it can to help Greece get out from under its cloud of debt.

ANGELA MERKEL, German chancellor (through translator): The all-important thing is — and we will provide every assistance that is wanted from the German side — that Greece wins back confidence, that we get out of this terrible development that there is bad news every month, and that the impression arises on the markets that Greece is on the right track.

HARI SREENIVASAN: Merkel met later with the Greek prime minister, George Papandreou. He guaranteed that Greece would meet its commitments, through new austerity measures that include pension cuts and taxes.

GEORGE PAPANDREOU, Greek prime minister: Is there any hope? Will we ultimately succeed? My answer is, yes, we can. Greece has the potential. Europe has the potential. And through global cooperation, we all have the capability to turn this crisis into an opportunity for real and necessary change.

HARI SREENIVASAN: As part of that effort, the Greek Parliament approved a new property tax. It is being added to electricity bills, so those who refuse to pay the tax could have their power cut off.

The U.S. Congress has avoided a government shutdown for now. Last night, the Senate approved a deal to keep federal agencies running through Nov.18. The House is expected to approve that bill next week, when it returns from a recess. A smaller one-week spending bill is covering things until then. An impasse over disaster aid ended Monday when the Federal Emergency Management Agency said it has enough money to finish out the fiscal year, which ends Friday.

Rebel fighters in Libya gained ground in Moammar Gadhafi’s home city today. Tanks pushed into the eastern outskirts of Sirte ready to do battle with Gadhafi loyalists, who continue to offer strong resistance. The rebels also set up checkpoints to arrest any of Gadhafi’s troops who try to slip out with fleeing civilians.

The government of Israel has approved construction of 1,100 new housing units in a Jewish enclave in Jerusalem. At the same time, Prime Minister Benjamin Netanyahu ruled out a new freeze on settlements. The chief Palestinian negotiator, Saeb Erekat, said the decision amounted to 1,100 nos to the resumption of peace talks.

And, in Washington, State Department spokesman Victoria Nuland joined the criticism.

VICTORIA NULAND, State Department spokeswoman: You won’t be surprised that we are deeply disappointed by this morning’s announcement. We consider this counterproductive to our efforts to resume direct negotiations between the parties. And we have long urged both parties to avoid actions which could undermine trust, including in Jerusalem, and we will continue to work with the parties to try to resume direct negotiations.

HARI SREENIVASAN: The Israeli announcement came just days after the Palestinian National Authority asked to be recognized as a full member state at the United Nations.

In the Philippines, a powerful typhoon killed at least 16 people and caused catastrophic flooding. The majority of the deaths were in the sprawling capital city of Manila, hit by downpours and winds gusting to 93 miles an hour. The downtown was flooded, including hotels and the seaside American Embassy. The Philippines is hit by about 20 Pacific storms and typhoons each year, including one that killed 500 people in 2009.

More than 270 people were hurt today in a subway crash in Shanghai, China. A moving train rear-ended a stopped train during a signal failure. Emergency workers rushed to help the injured, while others were able to evacuate the cars. Above ground, police set up roadblocks to clear a path for ambulances as people were brought out on stretchers. It was the most recent in a series of problems for China’s growing transportation system.

Those are some of the day’s major stories.