article: The rally followed sharp rises in European markets, which came after France and Germany proposed a fiscal union ahead of a summit on 9 December. A union would mean binding limits on eurozone government borrowing. Markets hope that the agreement will open the way for the European Central Bank to bail out Italy and Spain. On Wall Street, the Dow Jones index rose 2.6% to 11,523.01 points, while the broader S&P 500 index rose 2.9% to 1,192.57 points. US markets were also helped by data suggesting that recent consumer spending has been strong. The US National Retail Federation said sales during the Thanksgiving holiday weekend climbed 16% to a record $52.4bn. In Europe, the FTSE closed up 2.8%, Germany's Dax was 4.6% higher and France's Cac added 5.4%, led by banks and other financial stocks. These gains followed strong rises in Asian markets overnight. The stock market rally came despite ratings agency Moody's warning that the eurozone crisis threatens the credit rating of all the bloc's members. Moody's said the eurozone could still face a number of shocks as countries struggled with high debt levels, denying them access to markets and requiring further bailouts. "This would very likely cause those countries' ratings to be moved into speculative [junk] grade in view of the solvency tests that would likely be required and the burden-sharing that might be imposed if, as is likely, support were to be needed for a sustained period," Moody's said in its report. On plans for fiscal union, the German Finance Minister, Wolfgang Schaeuble, said his government was working closely with the French on the proposal. "We are working intensively for the creation of a stability union," he said in a statement. "That is what we want to secure through treaty changes, in which we propose that the budgets of member states must observe debt limits." The minister acknowledged on Sunday that it may not be possible to get necessary treaty changes agreed by all 27 European Union members states. In the UK, Conservative backbench MPs in the coalition government have been demanding a referendum on the UK's EU membership as a condition of ratifying any new treaty, while Prime Minister David Cameron has said he will use it as an opportunity to demand new policy opt-outs from Brussels. There has been speculation that the 17 eurozone governments may go it alone - passing separate bilateral agreements on the new fiscal rules, thereby avoiding the need for EU treaty changes, and circumventing a UK veto. The unprecedented move comes as many eurozone governments, including Italy and Spain, have faced sharply rising borrowing costs in nervous financial markets. "We are in an economic war with a number of powerful speculators who have decided that the end of the euro is in their interest," claimed the French Agriculture Minister Brun Le Maire on Monday. By Robert PestonBusiness editor, BBC News The price for the Italian government of borrowing remains prohibitively high. Which implies that even if the Italian government isn't talking to the IMF about financial support, it may only be a
summary: Wall Street rebounded from seven days of losses on hopes that eurozone leaders will stitch together a new deal to help the bloc's ailing economies.