NEW YORK - U.S. stocks got a boost Thursday after European Central Bank president Mario Draghi said the bank would do whatever it takes to preserve the euro.
The Dow Jones industrial average rose 172 points, or 1.4%, the S&P 500 added 17 points, or 1.3% and the Nasdaq gained 33 points, or 1.2%.
Speaking at an investment conference in London, Draghi's comments suggest the ECB may start buying bonds again in an effort to help bring down skyrocketing borrowing costs.
"His comments were a bit of a game changer because they put the power back in the ECB to buy Spanish and Italian bonds," said Paul Zemsky, chief investment officer for ING Investment Management. "That caused a great turnaround in sentiment."
Analysts also said Draghi's comments signify that another long-term refinancing operation-- the ECB's cheap lending program aimed at preventing a credit crunch-- is back on the table.
Europe's debt crisis remains a significant headwind for global markets, as investors have been growing increasingly convinced that Spain will need a sovereign bailout. The country's borrowing costs remain unsustainably high, with Spain's 10-year yield hovering near 7%, after touching an all-time high of 7.75% Wednesday.
While Draghi was driving the early rally, investors also had a fresh batch of corporate earnings to contend with.
Exxon Mobil's profit surged 49% to $15.9 billion during the second quarter. The massive number -- which would be by far the highest quarterly profit ever for any company -- included a special gain for divestitures. Shares of Exxon edged higher.
The most anticipated numbers of the day, however, won't come until after the close, when Facebook reports its first set of quarterly results as a public company.
Of the 215 S&P 500 companies that have reported so far, about 67% have beat Wall Street's expectations, according to S&P Capital IQ. Analysts are currently expecting overall S&P 500 second-quarter earnings to decline 0.38%, which would mark the end of a 10-quarter winning streak.
U.S. stocks closed the day in mixed territory Wednesday.
World markets: European stocks jumped after Draghi's comments. Britain's FTSE 100 rose 1.4%, the DAX in Germany added 1.9% and France's CAC 40 surged 3%.
Asian markets ended mixed. The Shanghai Composite lost 0.5%, while the Hang Seng in Hong Kong ticked up 0.1% and Japan's Nikkei rose 0.9%.
Economy: The number of people filing for initial jobless claims fell 35,000 to 353,000 in the latest week, according to the Labor Department. Analysts were expecting a reading of 381,000 unemployment claims.
The Census Bureau reported that durable goods orders rose 1.6% in June, far better than the 0.3% increase economists were expecting.
Mortgage rates reached all-time lows this week for both 30-year and 15-year fixed-rate loans. The average rate for a 30-year mortgage fell to 3.49%, according to the weekly survey by Freddie Mac, and the 15-year dipped to 2.80%. Rates have fallen or matched lows for 13 of the past 14 weeks.
Not all news out of the housing market was positive though. Pending home sales slipped 1.4%, according to the National Association of Realtors. Economists had been expecting growth of 0.9%, according to Briefing.com.
The mixed (but largely still sluggish) economic data has revived the debate over whether the Federal Reserve will take steps soon to stimulate the economy.
Companies: Zynga's stock plunged 40% early Thursday, a day after the online-gaming company badly missed earnings expectations. Shares of Facebook, which earns roughly 18% of its revenue from users who play Zynga games on its platform, were also down sharply in pre-market trading.
Facebook is expected to report quarterly earnings of 12 cents a share on $1.15 billion in revenue later Thursday, according to a survey of analysts by Thomson Reuters.
Shares of Sprint Nextel rallied after the wireless carrier reported higher revenues for the second quarter.
Dow component 3M reported better-than-expected earnings, but the company's revenue fell short of estimates.
Shares of Whole Foods were up sharply after the organic grocery store chain's earnings surpassed Wall Street's expectations and the company raised its forecast for the year.
Currencies and commodities: The euro popped in response to Draghi's comments, rising more that 1% versus the dollar. The greenback was down versus the British pound, but up against the Japanese yen.
Oil for September delivery rose 81 cents to $89.78 a barrel.
Gold futures for August delivery gained $6.50 to $1,614.60 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 1.43% from 1.41% late Wednesday.
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