Stocks close higher as Europe nears budget pact

Stocks are closing higher after most European nations agreed to forge closer economic ties, raising hopes that the region is close to resolving its debt crisis.

All 17 nations that use the euro agreed to sign a treaty that allows a central European authority closer oversight of their budgets. Nine other EU nations are considering it. Britain is the lone holdout.

The Dow Jones industrial average closed up 186 points, or 1.6 percent, at 12,184. The Standard & Poor’s 500 index closed up 21, or 1.7 percent, at 1,255. The Nasdaq composite index closed up 50, or 1.9 percent, at 2,647.

About six stocks rose for every one that declined on the New York Stock Exchange. Volume was very light at 3.6 billion shares.