By Caroline Valetkevitch

NEW YORK (Reuters) – Stocks surged on Wednesday after major central banks agreed to make cheaper dollar loans for struggling European banks to prevent the euro-zone debt woes from turning into a full-blown credit crisis.

The Dow posted its best day since March 2009 after the Federal Reserve, the European Central Bank and other major central banks stepped in to head off escalating funding pressures that threaten the key arteries of the world’s financial system.

The S&P 500 scored its best daily percentage gain since August.

The central banks’ liquidity move touched off a buying frenzy in financial shares. The S&P financial sector index gained 6.6 percent, with Bank of America the most actively traded stock. The stock jumped 7.3 percent to $5.44 on more than 420 million shares traded.

The drama in Europe kept the U.S. stock market on a roller-coaster ride throughout the month. For November, the S&P ended down just 0.5 percent, but the month was marked by sharp daily swings.

“You don’t have to fix everything, you have to be on a path towards fixing things,” said Tobias Levkovich, chief U.S. equity strategist at Citigroup in New York.

“Markets will reward you for the efforts you are making as long as you are moving in the right direction. It’s the carrot and the stick; you get rewarded when you do the right thing, and you get punished when you do the wrong thing.” For more visit: Yahoo Finance

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