Stocks soared Thursday, snapping a two-day drop in the Dow Jones industrial average, as European Central Bank President Mario Draghi pledged to defend the euro while American jobless claims fell and durable-goods orders rose.
The Dow closed up 211.88, or 1.67%, at 12,887.93; the S&P 500 rose 22.13, or 1.65%, to end at 1,360.02; and the Nasdaq composite was up 39.01, or 1.37%, at 2,893.25. All numbers are preliminary.
Global stocks rallied as Mr. Draghi suggested policymakers might intervene in bond markets as surging yields in Spain and Italy threaten the existence of the 17-nation currency bloc. The ECB mothballed its bond-buying program in March as it pushed governments to do more to control their deficits.
“It is a big deal,” said Liz Ann Sonders, chief investment strategist at Charles Schwab Corp. “The markets have been looking for a more definitive acknowledgement by key people like Draghi that they are willing to do what they need to do. We feel that if they want to save the euro, it would involve true QE,” she said, referring to bond buying to stimulate the economy.
In the U.S., fewer people than forecast filed first-time claims for unemployment insurance payments last week. Applications for jobless benefits decreased by 35,000 in the week ended July 21 to 353,000, Labor Department figures showed. Economists forecast 380,000 claims, according to the median estimate in a Bloomberg News survey.
Orders for U.S. durable goods climbed more than projected in June as a surge in demand for aircraft and military hardware overshadowed a slump in business equipment spending. Bookings for goods meant to last at least three years rose 1.6% for a second month, a Commerce Department report showed. The median forecast of economists surveyed by Bloomberg News called for a 0.3% gain. Orders excluding the volatile transportation category unexpectedly dropped 1.1% in June, the most in five months.
