A move by the world’s central banks to lower the cost of borrowing exhilarated investors Wednesday, sending the Dow Jones industrial average soaring 490 points.

It was the Dow’s biggest gain since March 2009 and the seventh-largest of all time.

Large U.S. banks were among the top performers, jumping as much as 11 percent. 

Bank stocks soared as fears about an imminent disaster in the European financial system ebbed.

American and European banks are connected by contracts, loans and other financial entanglements, meaning that a European financial crisis would punish U.S. bank stocks. The brighter outlook that emerged Wednesday relieved some investor concerns.

The Dow rose 4.2 percent to close at 12,045. It has more than gained back the 564-point slump it had last week.

It is up 813 points, or 7.3 percent, so far this week. The last time the Dow closed up more than 400 points was Aug. 11.

The Standard & Poor’s 500 closed up 52, or 4.3 percent, at 1,247. The Nasdaq composite index closed up 105, or 4.2 percent, at 2,620.

Seven stocks rose on the New York Stock Exchange for every one that fell. Volume was heavy at 5.7 billion shares.

A string of positive U.S. economic news also propelled the market higher. An index measuring manufacturing in the Midwest surged to a seven-month high; private company hiring jumped in November to the highest level this year, according to payroll company ADP; and the number of contracts to buy homes jumped in October to the highest level in a year.

Stocks of local interest were also up. Home Bancshares (HOMB) was up 1.40 to 24.86; Acxiom (ACXM) was up 74 to close at 12.44; Walmart (WMT) was up 73 to close at 58.90; J.B. Hunt (JBHT) closed at 45.72, up 1.20; Southwestern Energy (SWN) closed at 38.05, up 1.15; and Hewlett Packard (HPQ) closed at 27.95, up 1.05.

(Staff writer Becky Harris contributed to this report.)