NEW YORK — Stocks had another turnaround Thursday and rocketed higher after China reassured investors it doesn’t plan to sell the European debt it holds.

The Dow Jones industrial average surged nearly 285 points. Treasury prices tumbled as traders funneled money into riskier assets like stocks and commodities.

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Traders working on the floor at the New York Stock Exchange Thursday had a rare good day, as the market reversed a slide that had seen losses in eight of 10 days. The Associated Press

China’s show of confidence in Europe let the market resume a rally that stalled late Wednesday following a report that the Chinese government was considering cutting its European debt holdings. If that were true, such a move would have signaled that China didn’t think Europe would be able to contain the crisis. The agency that manages China’s $2.5 trillion in foreign reserves denied the report.

Analysts also said some bounce has been expected after the slide that drove the Dow down 11 percent from its 2010 peak a month ago. Traders cautioned that this might not be a rally but merely a break in selling.

Some of the climb could be tied to what’s called “short-covering.” That occurs when traders are forced to buy stock after having earlier sold borrowed shares in a bet that the market would fall. Though it’s difficult to determine how much lift short-covering might be giving stocks, the rush to cover misplaced bets can add to a rally.

The steep gains Thursday were welcome after the Dow dropped eight of the prior 10 days. Twice this week, stocks have climbed for much of the day only to see the advances erased in late slides. The Dow rose 135 points Wednesday morning, but ended the day down about 69.

Peter Tuz, president of Chase Investment Council in Charlottesville, Va., said the market has fallen too quickly. He said a break was due because there have been so many days with heavy selling.

“It’s like a 100-year flood — having 3 of them in a year,” Tuz said. “That to me was an indication that the market was clearly oversold.”

Concerns about debt problems in Europe have pounded stocks around the world this month. Traders were initially worried that banks would be hit if weaker countries like Greece or Portugal defaulted on their debt. Now that a nearly $1 trillion European Union rescue plan has emerged, the more recent fear has been that budget cuts in European countries will slow a global recovery.

The euro, which is seen as an indicator for confidence in the health of Europe’s economy, rose to $1.2358 Thursday, a day after nearing the four-year low it hit last week. Trading in major markets around the world has often tracked the euro in recent weeks.

Yu-Dee Chang, principal at ACE Investment Strategists in McLean, Va., said investors know that the problems in Europe will take time to resolve. Chang said the uncertainty about whether the U.S. economy will continue to rebound is leading many traders to make short-term bets on stocks.

And that is adding to the market’s swings.

“I’m willing to buy at certain times on dips but any time I get a nice profit after a certain stretch — I’m going to take my profit,” Chang said.

He expects that the market will remain volatile for at least the next six months. “I just don’t want to be long-term committed.”

The Dow rose 284.54, or 2.9 percent, to 10,258.99. It was the biggest gain for the Dow since it soared 405 points on May 10 after the European Union announced a bailout for debt-strapped countries.

The climb vaulted the Dow back above 10,000. It closed below that psychological benchmark on Wednesday for the first time since February.

The Standard & Poor’s 500 index rose 35.11, or 3.3 percent, to 1,103.06. The Nasdaq composite index climbed 81.80, or 3.7 percent, to 2,277.68, putting it back in the black for 2010. The Dow and the S&P 500 index are still lower for the year.

Major stock indexes have also erased their losses for the week.

Bond prices tumbled, pushing interest rates higher.

The news from China overshadowed disappointing reports on the U.S. economy.

The Labor Department said initial claims for unemployment benefits fell last week, but not by as much as economists had forecast.

A report on gross domestic product indicated that the U.S. economy did not grow as fast in the first quarter as previously thought.

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