Stocks rally on investor hopes for a Europe fix

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NEW YORK (AP) — Stocks are rising after the market’s worst week in nearly three years as investors bet that the European Central Bank will take action to prop up the region’s unstable economies.

Finance ministers pledged over the weekend to take bolder steps to fight Europe’s debt problems.

The Dow Jones industrial average is up 127 points, or 1.2 percent, at 10,889 at midday. The Standard & Poor’s 500 index is up 8, or 0.7 percent, to 1,144. The Nasdaq composite index is up less than one point, to 2,483.

News that sales of new homes in the U.S. fell to a six-month low sent major indexes down in morning trading, but indexes turned higher after 10 a.m. Eastern.