New York, Oct 11 (IANS): US stocks surged Monday, with the blue-chip Dow soaring nearly 250 points, as news showed Germany and France were near a final deal to shore up European banks, Xinhua reported.

German Chancellor Angela Merkel and French President Nicolas Sarkozy announced Sunday that there was an agreement to strengthen European banks.

Investors hoped that this would help eurozone banks out of trouble and improve Europe's woeful financial situation.

Meanwhile, traders were looking forward to a new earnings season which is going to officially kick off Tuesday when Alcoa reports its third-quarter results after the closing bell.

The incoming earnings season is regarded to be especially important by some traders to decide whether the market is over-priced.

The Dow Jones industrial average rallied 265.95 points, or 2.40 percent, to 11,369.07. The Standard & Poor's 500 surged 32.12 points, or 2.78 percent, to 1,187.58. The Nasdaq Composite Index soared 73.00 points, or 2.94 percent, to 2,552.35.