2003 bear markets, moves above which could trigger additional buying activity," Merrill said in a note. The narrower DJ Euro Stoxx 50 index surged 1.6 percent to 3,125.9 points. The euro continued its slide, sinking to fresh 7-1/2 month lows against the dollar near $1.22 on continued political uncertainty and weak economic data. Dutch voters looked set to follow French voters in rejecting the European Union constitution, and there were media reports that the possible failure of European Monetary Union was discussed at a meeting attended by high-level German financial officials. The weaker euro helped European manufacturers and exporters like chemicals companies, which have significant costs in euros and sales in dollars. BASF rose 2.1 percent, while Bayer added 2.3 percent. Merger and acquisition speculation also supported some stocks, with construction company Eiffage up 3.8 percent, despite Spain's FCC denying market speculation it was looking to buy its French rival. Versatel closed 4.6 percent higher after the Dutch telecoms company said it was continuing talks with its major shareholder, Talpa Capital, and peer Belgacom about a tie-up that could include a public bid for Versatel. Around Europe, London's FTSE 100 closed 1 percent firmer, while both Paris's CAC-40 and Zurich's SMI rose 1.4 percent. Frankfurt's DAX closed 1.5 percent higher. In New York, the blue-chip Dow Jones industrial average was 0.9 percent firmer at 10,563.6 points, while the Nasdaq Composite Index had risen 1.1 percent to 2,090.6 points by 1620 GMT.