中国现在在国际上已经一言九鼎。今天一句话就推升欧元。

NEW YORK (AP) -- Stocks had another turnaround Thursday and rocketed higher after China reassured investors it doesn't plan to sell the European debt it holds.

The Dow Jones industrial average rose about 220 points in late afternoon trading, while Treasury prices tumbled as traders funneled money into riskier assets like stocks and commodities.

The show of confidence in Europe let the market resume a rally that stalled late Wednesday following a report that China was considering cutting its exposure to European debt. That would have signaled that China didn't think Europe would be able to contain the crisis. The agency that manages China's $2.5 trillion in foreign reserves denied the report.

Analysts also said some bounce has been expected after heavy selling that drove the Dow down 11 percent from its 2010 peak a month ago. Traders cautioned that this might not be a rally but merely a break in selling.

Some of the climb could be tied to what's called "short-covering." That occurs when traders are forced to buy stock after having earlier sold borrowed shares in a bet that the market would fall. Though it's difficult to determine how much lift it might be giving stocks, the rush to cover misplaced bets can add to a rally.

The steep gains Thursday were welcome after the Dow dropped eight of the last days. But trading has been volatile and recent weeks have shown that an early advance is no guarantee that stocks will end the day higher. Twice this week, stocks have climbed for much of the day only to see the advances erased in late slides. The Dow rose 135 points Wednesday morning, but ended the day down about 69.

Peter Tuz, president of Chase Investment Council in Charlottesville, Va., said the market has fallen too quickly. He contends that a break was due because there have been so many days with heavy selling.

"It's like a 100-year flood -- having 3 of them in a year," Tuz said. "That to me was an indication that the market was clearly oversold."

Concerns about debt problems in Europe have pounded stocks around the world this month. Traders were initially worried that banks would be hit if weaker countries like Greece, Portugal or Spain defaulted on their debt. Now that a nearly $1 trillion European Union rescue plan is coming together, the more recent fear has been that budget cuts in European countries will slow a global recovery.

The euro, which is seen as an indicator for confidence in the health of Europe's economy, rose to $1.2357 Thursday after nearing on Wednesday the four-year low it hit last week. Trading in major markets around the world has often tracked the euro in recent weeks.

Yu-Dee Chang, principal at ACE Investment Strategists in McLean, Va., said investors know that the problems in Europe will take time to resolve. Chang said the uncertainty about whether the U.S. economy will continue to rebound is leading many traders to make short-term bets on stocks. That is adding to the market's swings.

"I'm willing to buy at certain times on dips but any time I get a nice profit after a certain stretch -- I'm going to take my profit," Chang said. He expects that the market will remain volatile for at least the next six months.

Major stock indexes erased their losses for the week. In the final hour of trading, the Dow rose 219.92, or 2.2 percent, to 10,194.37. It was the biggest gain for the Dow since it soared 405 points on May 10.

The Standard & Poor's 500 index rose 27.81, or 2.6 percent, to 1,095.76, while the Nasdaq composite index climbed 68.46, or 3.1 percent, to 2,264.34.

At the New York Stock Exchange, about 2,850 shares rose while only about 220 fell. Volume came to 907 million shares.

Bond prices tumbled, pushing interest rates higher. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.34 percent from 3.19 percent late Wednesday.

Analysts say the market's abrupt slide in the past month is part of the hangover from the financial crisis in late 2008 and early 2009. The collapse of Lehman Brothers dried up credit around the world and pounded an economy already into recession into a steep slide. With that fresh in investors' minds, traders found it safer to dump stocks first without waiting to see whether the problems in Europe would hurt the U.S.

In other trading, crude oil rose $2.99 to $74.50. Gold fell.

Energy stocks led the market higher on the climb in oil. Shares of BP PLC rose $2.57, or 6.1 percent, to $44.98 after the company and the Coast Guard said an effort to plug the leaking oil in the Gulf appeared to be working.

At the same time, new estimates Thursday indicated that the spill has surpassed the 1989 Exxon Valdez accident as the worst in the nation's history.

The news from China overshadowed disappointing reports about the U.S. economy. The Labor Department said initial claims for unemployment benefits fell last week, but not by as much as economists had forecast. A report on gross domestic product indicated that the U.S. economy did not grow as fast in the first quarter as previously thought.

In other trading, the Russell 2000 index of smaller companies rose 21.80, or 3.4 percent, to 664.42.

Britain's FTSE 100 and Germany's DAX index each rose 3.1 percent, while France's CAC-40 climbed 3.4 percent. Japan's Nikkei stock average rose 1.2 percent.