Dow points aren’t what they used to be

The Dow Jones Industrial Average (INDU) reached 12,045.68, up 490.05 points from yesterday’s close. Adjusting for the market’s volatility in 2011, the gain is equal to about 240 points in the first nine years of the last decade, Bloomberg data show. (Bloomberg.com)

US stocks surge as central banks act

Wall Street staged its biggest rally for months overnight – Australian time – after central banks tackled European debt and the US economy  stirred.

The Dow Jones index surged by 483.77 points to 12,039.40.

Bloomberg was reporting that the US Federal Reserve and five other central banks agreed to reduce the interest rate on dollar liquidity swap lines by 50 basis points.

It said they had also agreed to extend their authorization through Feb. 1, 2013.

The Bank of Canada, Bank of England, Bank of Japan, European Central Bank and Swiss National Bank are involved in the coordinated action.

U.S. stocks rallied, sending benchmark gauges toward their biggest gains since August.

Meanwhile, in the U.S., the number of Americans signing contracts to buy previously owned homes rose more than forecast.

And companies added more workers than anticipated in November, according to a private report based on payrolls

“The economic backdrop continues to improve,” Burt White, who helps oversee about $315 billion as chief investment officer at LPL Financial Corp. in Boston, said in a telephone interview, with Bloomberg.