NEW YORK: Stocks rallied Thursday, lifting the Dow Jones industrial average to its best day of the month and into positive terrain for the week, after the European Central Bank signaled its intention to preserve the euro currency.
The market is rallying amid “short-covering on questionable promises from the ECB President Mario Draghi. You wonder whether or not he is referring to keeping the euro as the euro, or is he trying to play politics with his words,” said Robert Pavlik, chief market strategist at Banyan Partners LLC.
The ECB leader suggested that policy makers could step into bond markets as rising yields in Spain and Italy threatened to unravel the 17-nation eurozone.
“Within our mandate, the ECB is ready to do whatever it takes to preserve the euro,” he said at an investor conference.
Bond yields in Spain and Italy plunged, temporarily removing a recent drag on sentiment. Spain’s 10-year note yield fell back under 7 percent.
“It’s hard to tell whether he’s hoping to encourage [the] market with what amounts to meaningless promises, or whether they’ve really changed their perspective on how much liquidity they are willing to provide,” said Bruce McCain, chief investment strategist at Key Private Bank.
Extending gains into a second session, the Dow Jones industrial average rose 211.88 points, or 1.7 percent, to 12,887.93, with the blue-chip index up 0.5 percent for the week.
In its first positive finish in five trading sessions, the S&P 500 index climbed 22.13 points, or 1.7 percent, to 1,360.02. That was also the S&P 500’s best day of the month.
Telecommunications shares led gains that included all of its 10 sectors. Sprint Nextel Corp. surged 20 percent after the wireless carrier reported increased spending by customers on data plans.
The Nasdaq composite index advanced 39.01 points, or 1.4 percent, to 2,893.25.
Gold prices rose for a second session, climbing $7 to $1,615.10 an ounce on the Comex division of the New York Mercantile Exchange. Crude oil futures rose 42 cents to $89.39 a barrel.
The day’s data contained signs of improvement in the job market and manufacturing but a slowdown in housing.