U.S. stocks rallied on Wednesday on news that euro zone leaders plan to boost the power of the region's bailout fund, while the euro fell as investors awaited details that will not be forthcoming until next month.

Europe's leaders intend to multiply their rescue fund fourfold to one trillion euros and press Greece's creditors to accept losses of over 50 percent on their bondholdings, a draft statement from an emergency summit obtained by Reuters said.

Financial markets rose and fell in a roller-coaster session that was driven by speculation and lack of news from Brussels, where leaders of the European Union were meeting to hammer out a solution to the two-year-old sovereign debt crisis.

Oil prices fell as concerns about U.S. inventories added to caution about Europe's ability to address the debt crisis, while U.S. Treasuries, a traditional safe haven, also fell as the stock market rallied.

U.S. and European equities initially rose 1 percent before losing gains and then staging a rebound. Gains on the tech-rich Nasdaq were held in check by a 13 percent plunge in shares of Amazon.com (AMZN.O) after it provided a disappointing outlook.

The Eurogroup of finance ministers will be asked to finalize the terms and conditions for how the rescue fund, the European Financial Stability Facility, will operate under the leverage schemes in November, the draft statement said.

"Even when the plan is laid out, it does not necessarily mean that everything from then on will be very smooth. Volatility will continue in the markets," said James Barnes, senior fixed-income manager at National Penn Investors Trust Company in Wyomissing, Pennsylvania.

The Dow Jones industrial average .DJI gained 162.42 points, or 1.39 percent, to 11,869.04. The Standard & Poor's 500 Index .SPX added 12.95 points, or 1.05 percent, at 1,242.00. The Nasdaq Composite Index .IXIC was up 12.25 points, or 0.46 percent, at 2,650.67.

The Dow was helped by a 4.5 percent jump in Boeing (BA.N) shares to $66.56 after the plane maker posted forecast-beating results and raised its full-year earnings outlook.

Stocks in Europe, which closed before the latest news on the bailout fund, eked out gains. The pan-European FTSEurofirst 300 .FTEU3 index of top shares closed up 0.1 percent at 983.76 after rise and falls of about 1 percent.

MSCI's all-country world equity index .MIWD00000PUS rose 0.4 percent.

Since October 4, when the S&P 500 slumped to intraday levels last seen in September 2010, the benchmark index has surged nearly 15 percent, mostly on hopes for a solution to the debt crisis.

Optimism rose after the incoming head of the European Central Bank threw the euro zone a lifeline hours before the summit by signaling the bank would go on buying the bonds of troubled countries to combat market turmoil.

Investor optimism was boosted after Germany's lower house of parliament approved a motion to strengthen the EFSF, the bailout fund, providing Chancellor Angela Merkel with the mandate she needs to negotiate at EU summit.

But the investors remained hungry for details of the rescue plan.

"Bottom line, no major surprises so far. We still need to figure out what the details of the 'leverage' will be," said John Bland, co-founder of Global-View.com in Cape May, New Jersey. "Frankly, indicating that the details will not be available until 'late November' is a bit of a disappointment."

The dollar touched a record low against the yen, heightening a risk that Japanese authorities might intervene. The euro was just below break-even at $1.3901.

U.S. Treasury debt fell, with the benchmark 10-year U.S. Treasury note down 26/32 in price to yield 2.21 percent.

Oil prices also fell. Brent oil futures fell $2.01 to settle at $108.91 a barrel, while U.S. crude settled down $2.97 at $90.20 a barrel.

Gold rose 1.5 percent to one-month highs, notching its longest stretch of gains in over two months, as investors once again sought the safety of bullion in the face of uncertainty over the outcome to the EU summit.

Bullion has gained nearly 7 percent during its four-day winning streak.

Spot gold prices rose $15.60 to $1,718.90 an ounce.