Fin24

Wall St soars on ECB rescue hopes

2012-07-27 08:30

New York - US stocks soared on Thursday, buoyed by a pledge from Europe's top central banker to do everything possible to save the eurozone from a raging sovereign debt crisis.

The Dow Jones Industrial Average finished 212.88 points higher at 12,887.93.

The S&P 500-stock advanced 22.13 points to 1,360.02. The tech-rich Nasdaq gained 39.01 to 2,893.25.

The normally cautious head of the European Central Bank, Mario Draghi, gave his most resounding defense of the under-siege currency to date, sending markets around the world solidly into positive territory and lifting the euro.

The "ECB is ready to do whatever it takes to preserve the euro. And believe me it will be enough," Draghi told a business summit in London.

"The comments by the central banker sparked speculation the ECB could do additional bond buying to lower soaring yields of Italian and Spanish debt," said analysts at Wells Fargo Advisors.

US economic data was mixed. Weekly jobless claims dropped sharply, but durable goods orders, minus transportation, fell in June. Pending home sales fell in June, instead of rising as expected.

Investors had a flood of earnings reports to distill. Dow heavyweight ExxonMobil jumped 1.5%. The energy giant posted a 49% profit rise for the second quarter, but missed Wall Street estimates for earnings excluding a one-time gain.

Fellow Dow component 3M rose 2.1%. The conglomerate maker of Post-It notes and Scotch Tape reported second quarter profit slightly above estimates, but revenues fell.

Do-it-yourself retailer Home Depot led the Dow higher with a hefty 3.6% gain.

United Continental Holdings, the parent of United Airlines, the world's biggest airline, reported a steep fall in second-quarter profit on weak revenue growth. UAL shares skidded 5.9%.

Online game company Zynga plunged 37.5% after reporting a shock $22m loss for the second quarter.

The poor results for Zynga, which grew out of a game platform on Facebook, boded ill for Facebook. The social media titan fell 8.5 percent. Facebook reports its first quarterly results as a public company after the market closes.

On Wednesday, stocks closed mixed on a mixed batch of big company quarterly earnings reports.

Bond prices fell. The 10-year Treasury yield rose to 1.43% from 1.41% on Wednesday, while the 30-year increased to 2.49%  from 2.47%. Bond prices and yields move in opposite directions.