World stock markets rose Thursday as investors welcomed a move by major central banks to supply funds to Europe’s ailing banking system.

In New York, the Dow Jones Industrial Average and the S&P 500 index were up 1 percent in mid-day trading, while the NASDAQ Composite index was 0.9 percent higher.

The European Central Bank said Thursday it will provide three-month dollar loans to European commercial banks that have struggled to borrow the U.S. currency in recent weeks due to concerns about their exposure to debt-ridden EU economies.

That announcement sent European banking shares and major European stock indexes sharply higher by the close of trade. The Paris CAC 40 index rose 3.3 percent to 3,046; Frankfurt’s DAX index gained 3.2 percent to 5,508, and the London FTSE 100 index ended up 2.1 percent at 5,338.

German and French backing for the struggling Greek economy also lifted the markets, reassuring investors that Athens will not be defaulting on its debts anytime soon.

Earlier in Asia, Tokyo’s Nikkei index rose 1.8 percent to finish at 8,669. Hong Kong’s Hang Seng index rose 0.7 percent to 19,182.

The spot price of gold lost 2 percent to trade at $1,782.90 an ounce. The euro strengthened by almost 1 percent against the dollar. The U.S. currency was slightly stronger against the yen.