Stocks are closing higher after Greece scrapped a referendum on unpopular budget cuts and U.S. unemployment claims fell to the lowest level in five weeks.

Greece's prime minister abandoned his effort to put a package of austerity measures to a public vote. A "no" vote could have caused chaos in Europe's financial system.

Applications for unemployment benefits in the U.S. fell below 400,000 last week for only the third time since April, a sign the job market may be improving.

The Dow rose 208 points, or 1.8 percent, to 12,044. The S&P 500 gained 23, or 1.9 percent, to 1,261. The Nasdaq rose 58, or 2.2 percent, to 2,698.

Four stocks rose for every one that fell on the New York Stock Exchange. Volume was average at 4.6 billion shares