Dow gains 277 points as European news looks a bit better

Guess investors were impressed with this morning's agreement that allows European banks to be bailed out directly without adding to sovereign debt in places like Spain and Italy. I know, it all sounds impossibly esoteric, but it's actually a big deal (or so they say) because higher sovereign debt means higher interest rates for the exposed euro zone nations. That's not good. Perhaps just as impressive is the fact that European officials agreed to anything (expectations for this week's summit were low). From the WSJ:

There was a palpable sense that by agreeing to reach across borders to rescue banks, European leaders had made at least an important philosophical step, albeit a small one, toward the broader sharing of risk that Germany has long resisted. Despite many problems left to solve, "you've got the first signs that collectively they are starting to understand the issue," said William Porter, head of credit strategy at Credit Suisse in London. "If you come out of a summit like this and the mood improves, it means everything rises," he said. "The challenge, as always, is how long it lasts."

In any event, the Dow's 277-point gain moves the index to 12,880. For the month, it was up 486 points, the biggest-ever point gain in June. Year to date, the Dow is back up 5.4 percent and all of a sudden investment accounts are looking a lot better than they did only a month ago. But there were plenty of rocky moments, as you can see by the chart (NYT).