But even as stock markets from Paris to New York joined in the euphoria, some bond and credit market rates, especially in Italy, barely flinched. That suggests doubts that the agreement will be a long-term fix for Europe’s mountainous debt problem or the pressing challenge of restoring growth to the continent’s moribund economies.
“Clearly, there is a massive celebration going on, but there are lots of worries, too,” said Jens Nordvig, an analyst with Nomura Securities in New York, who said it was still not clear where the billions of euros in new money pledged by European leaders after overnight negotiations in Brussels were going to come from. “Not one new euro has been committed,” he said. “Not one.”
The same sort of lift was seen after the last grand European summit meeting in July. But stocks fell and the interest rates on European debt and the insurance against default on those bonds spiked in the following weeks, as Europe’s economies slowed and it soon became evident that the plan was not going to be enough.
After the July 21 deal, the Standard & Poor’s 500-stock index in the United States fell below 1,300 after about a week and eventually sank to its lowest level for the year.
Since Oct. 3, however, the S.& P. has been on the rebound on expectations of a European deal and slightly better economic conditions in the United States and China. On Thursday, the broad market index jumped 3.4 percent, moving back into positive territory for 2011. Financial stocks were up more than 6 percent. If stocks do not lose any ground again this month, the S.&P. 500 is on track for the biggest monthly rally since 1974.
In Europe, stock markets in France and Germany soared, by 5.4 percent in Germany and 6.3 percent in France. The stocks of European banks, which the crisis has threatened to overwhelm, bounced back by as much as 23 percent.
Some analysts and investors said they feared another set-back could happen again and that the markets would remain volatile.
“You still have these great problems with the global economy,” said Richard Cookson, global chief investment officer of Citi Private Bank in London. “Growth is going to fall, and I don’t think we have seen the European crisis solved. And if it is not solved, it will get worse, because these things do not stand still.”
Jonathan Loynes, an economist with Capital Economics, wrote in a research note: “Over all, then, while the plans represent a step forward, we suspect that they will soon be viewed in the same way as every other policy response during this crisis — as too little, too late.”
Mr. Loynes wrote that he still expected a “prolonged in the euro zone” and further market turbulence, and he continued to have doubts about the future of itself “in its current form.”
Just a few weeks ago, stocks were dropping precipitously as the United States seemed headed toward a double-dip recession and Greece, and potentially other weakened European countries, appeared headed for default. But since then, stocks have risen as economic data suggest that the United States has fended off the immediate threat of a recession and that China appeared to be preparing for a soft economic landing as its economy slows. Stocks have also been helped by stronger than expected corporate earnings in the current reporting season.
There are still questions about whether the pickup in United States growth can be maintained, although figures released Thursday showed 2.5 percent annualized growth in the third quarter, the strongest showing in a year, boosting the stock market rally.
And now Europe has a three-pronged agreement to force private investors to write off half of the value of the Greek bonds they own, force European banks to raise about 106 billion euros ($150 billion) in new capital, and create on the face of it a much more powerful bailout fund to stop crises spreading to nations like Italy.
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