NEW YORK (Reuters) – Stocks rose on Thursday as appetite for riskier assets returned after a pledge by European leaders to support debt-ridden Greece eased fears of a possible sovereign default.

Initially stocks had wavered in choppy trade due to a lack of specifics on the European Union’s proposals.

By midday Wall Street mounted a sharp advance as investors saw the EU pledge as a bid to avert fallout from fiscal troubles in Greece and other members of the European single currency like Portugal and Spain.

Data pointing to stabilization in the U.S. labor market gave the market a further boost, along with a broker upgrade of bellwether 3M Co (MMM.N), whose stock shot up 1.6 percent.

“They moved everything up on more of a posture by the EU to come up with something creative on Greece as opposed to not knowing what to do,” said Stephen Carl, principal and head of U.S. Equity Trading at the Williams Capital Group in New York.

“It looks like they are putting things in place and the market is reacting favorably just because there is a plan. Let’s see how they implement it.”

The Dow Jones industrial average (.DJI) rose 96.66 points, or 0.96 percent, to 10,135.04. The Standard & Poor’s 500 Index (.SPX) gained 8.90 points, or 0.83 percent, to 1,077.03. The Nasdaq Composite Index (.IXIC) climbed 27.42 points, or 1.28 percent, to 2,175.29. Standouts included shares of energy, technology and natural resource companies.

Before the bell a government report showed applications for jobless insurance fell more than expected in the latest week, a signal the labor market continues to mend.

Shares of 3M Co, a diversified manufacturer, rose to $79.85 after Sanford C. Bernstein upgraded the company to “outperform” from “market-perform,” citing better margins and a higher growth rate.

Caterpillar Inc (CAT.N), another big manufacturer, rose 5.2 percent to $55.94 and ranked as a top boost to the Dow industrials.

On the Nasdaq, shares of video game publisher Activision Blizzard Inc (ATVI.O) jumped 9.9 percent to $11.09 after the company posted better-than-expected results and said it would start paying an annual dividend.

With the S&P 500 falling more than 7 percent from its 15-month closing peak of January 19, investors had been looking for a major catalyst to spur a search for cut-price stocks.

The S&P 500 is now only up 59.3 percent since its March 2009 bottom after having pulled back from a run-up of 70 percent since that significant low.

“Why should I as a worker pay for the errors in policies?” he asked, in response to reports that the embattled Greek state will cut his pay and, by extension, retirement benefits. “The worker can’t be the scapegoat. So we have to defend ourselves.”

As Damianidis and others on the state payroll prepare to stop work on Wednesday, fear is building that the country’s new government may lack the nerve to cut public wages and pension payments, which make up 51 percent of its budget.

Over the past decade, Greece took full advantage of a strong euro and rock-bottom interest rates to fuel a debt binge by the country’s consumers and its government. This year, if Greece can’t persuade investors to buy 53 billion euros of its government debt, it may have to seek a bailout from its European Union brethren or the International Monetary Fund – or, worse, default.

The stakes are high, not just for Greece but for the entire euro zone, where efforts to forge a common economic identity are threatened by the financial crisis. Last week, the panic spread to Portugal and Spain, and the cost of insuring their debt against a default soared to record levels as investors bet that, like Greece, governments in those countries won’t be able to rein in bloated budgets.