With traders reacting positively to comments by European Central Bank President Mario Draghi, stocks moved sharply higher during trading on Thursday. The markets also benefited from a batch of largely upbeat U.S. economic data.
After rallying at the open, the major averages remained in firmly positive territory throughout the session. The Dow jumped 211.88 points or 1.7 percent to 12,887.93, the Nasdaq surged up 39.01 points or 1.4 percent to 2,893.25 and the S&P 500 soared 22.13 points or 1.7 percent to 1,360.02.
Much of the strength on Wall Street came as traders reacted to Draghi's remarks at an investment conference in London during which he promised to do whatever is necessary to support the beleaguered eurozone.
"Within our mandate, the ECB is ready to do whatever it takes to preserve the euro," Draghi said. "And believe me, it will be enough."
Draghi's remarks generated optimism about the possibility of more action to ease the ongoing debt crisis at the next ECB monetary policy meeting next Thursday.
Relatively upbeat U.S. economic data also generated some buying interest, with a report from the Labor Department showing a much bigger than expected drop in weekly jobless claims.
The Labor Department said initial jobless claims fell to 353,000 in the week ended July 21st from the previous week's revised figure of 388,000. Economists had expected jobless claims to edge down to 380,000 from the 386,000 originally reported for the previous week.
A separate report from the Commerce Department showed a much bigger than expected increase in durable goods orders in the month of June, although the increase was largely due to a jump in orders in the volatile transportation sector.
Meanwhile, the National Association of Realtors released a report showing an unexpected decrease in pending home sales in the month of June.
Traders also digested the latest batch of earnings news, with oil giant Exxon Mobil (XOM: Quote) advancing by 1.5 percent after reporting strong second quarter profit growth due in large part to one-time gains.
3M (MMM: Quote), Dow Chemical (DOW: Quote), and Hershey (HSY: Quote) were among the other well-known companies that released their quarterly results.
While most of the major sectors showed notable moves to the upside on the day, electronic storage stocks posted particularly strong gains. Reflecting the strength in the storage sector, the NYSE Arca Disk Drive Index surged up by 5.5 percent.
Western Digital (WDC: Quote) helped to lead the storage sector higher, jumping by 20.9 percent after reporting much stronger than expected fourth quarter earnings.
Oil service stocks also moved sharply higher, driving the Philadelphia Oil Service Index up by 4.3 percent. Cameron International (CAM: Quote) and National Oilwell Varco (NOV: Quote) posted standout gains after reporting second quarter earnings that exceeded analyst estimates.
Significant strength also emerged among housing stocks, as reflected by the 2.7 percent gain posted by the Philadelphia Housing Sector Index. Telecom, railroad, and semiconductor stocks also saw considerable strength, with Sprint Nextel (S: Quote) leading the telecom sector higher.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Thursday. Japan's Nikkei 225 Index advanced by 0.9 percent, while China's Shanghai Composite Index fell by 0.5 percent.
Meanwhile, the major European markets showed strong moves to the upside on the day. The French CAC 40 Index soared 4.1 percent, while the German DAX Index jumped 2.8 percent and the U.K.'s FTSE 100 surged up 1.4 percent.
In the bond market, treasuries moved modestly lower, giving back some ground following the recent strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, crept up by 2.2 basis points to 1.428 percent.
Trading on Friday could be impacted by the release of the Commerce Department's advance estimate on second quarter GDP. Economists expect the report to show that the U.S. economy grew by 1.2 percent in the second quarter compared to the 1.9 percent growth seen in the first quarter.
On the earnings front, Facebook (FB: Quote) and Amazon (AMZN: Quote) are among the companies releasing their quarterly results after the close of today's trading, while Chevron (CVX: Quote) are Merck (MRK: Quote) among those due to report their results before the start of trading on Friday.
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by RTT Staff Writer
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