A late surge sent U.S. stock markets sharply higher after a report said major central banks would be ready to pump money into the financial system if needed.

The Reuters report said major central banks were preparing for coordinated action if the results of Greek elections on Sunday strain global financial markets.

The Dow Jones industrial average jumped 156 points to close at 12,652 on Thursday. That's a gain of 1.2 per cent. The Dow jumped about 100 points after the report came out and then pulled back.

The Standard & Poor's 500 increased 14 points to 1,329. The Nasdaq composite gained 18 to 2,836.

In Toronto, the S&P/TSX composite index didn't share in the rally, closing down 31 points at 11,466.

Markets have worried that the election will put in power a government prepared to violate the conditions of the international bailouts that are keeping Greece's economy afloat. The concern is Greece would default, be forced to leave the eurozone and trigger a financial crisis that results in a severe credit squeeze.

Popular resentment of austerity measures has fuelled a surge in popularity for political parties that want to renege on the rescue terms.

Sunday's election is seen as a close race between the biggest such party, the radical left Syriza, and the conservative New Democracy party, which wants to largely adhere to bailout pledges, with tweaks in favour of low earners.