US stock markets scored robust gains Tuesday after the embattled Italian prime minister, Silvio Berlusconi, said he would resign after austerity measures are approved.
The Dow Jones Industrial Average climbed 101.79 points (0.84 percent) to close at 12,170.18.
The tech-heavy Nasdaq Composite rose 32.24 points (1.20 percent) to 2,727.49, while the broader S&P 500 added 14.80 points (1.17 percent) to 1,275.92.
The indexes were volatile in the first part of trading, reflecting rumors that Berlusconi would resign after his coalition lost its majority in parliament.
They surged higher after Berlusconi announced he would step down once key reforms promised to the European Union and aimed at calming market turmoil are adopted this month.
"The market likes the fact that Berlusconi is going to resign once the austerity package is approved," said Peter Cardillo at Rockwell Global Capital.
"That should help relieve some of the market fears but forming a new government might take some time," he said. "This is a relief for now but the reality is that there might be a real hangover and a price to pay."
Fears have been rising that Italy, the eurozone\'s third-largest economy, would follow debt-strapped Greece to the brink of collapse.
Berlusconi -- a dominant feature in Italian politics for almost two decades -- had faced increasing calls for his resignation over the string of sex and corruption scandals as well as Italy\'s continued economic woes.
"It\'s not a character people have a lot of trust in, so they want to see him out of the picture," said Marc Pado at Cantor Fitzgerald.
Of the blue-chip Dow\'s 30 stocks, 27 finished in positive territory, notably the banks, which are sensitive to the European problems.
JPMorgan Chase added 2.2 percent and Bank of America gained 1.2 percent.
Fast-food giant McDonald\'s was among the rare Dow losers, slipping 0.02 percent after announcing a 5.5 percent rise in global sales in October.
Oil and gas explorer Pioneer Natural Resources lost 3.7 percent after it said it would offer 5.5 million shares for sale to raise new funds.
Online travel website Priceline jumped 8.6 percent after reporting earnings had doubled in the third quarter -- while warning that the current quarter would not meet earlier forecasts.
Bond prices tumbled. The yield on the 10-year Treasury rose to 2.07 percent from 1.99 percent Monday, while that on the 30-year Treasury moved to 3.12 percent from 3.04 percent.
Bond yields and prices move in opposite directions.
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