U.S. and European stock prices surged on Tuesday following news that eased worries over Europe’s debt crisis.

At the New York Stock Exchange, the Dow Jones Industrial Average jumped nearly three percent to close a little over 12-thousand.

Stock prices in Germany and France also surged around three percent.

The prices soared after German business confidence rose for the second straight month in December and as Britain’s consumer sentiment also improved from November. The Spanish government’s successful debt auction also attributed to the rise in stock prices.

In the U.S., the Commerce Department said builders broke ground on 685-thousand new homes last month, or up more than nine percent from October. The report drove housing stocks up.