Draghi’s dovish comments fuel U.S. stocks

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U.S. stocks rose for a second-straight session Thursday as investors digested dovish comments from European Central Bank President Mario Draghi as well as domestic economic reports. A jump in oil prices lifted energy and materials stocks.

The ECB kept interest rates unchanged as expected at its policy-setting meeting.During a press conference, Draghi reasserted the central bank was ready to “fully implement” its asset-buying program, which intended to run to Sept.16 “or beyond” if necessary. However, he said the committee did not discuss “increasing the size or pace of purchases.”

The S&P 500 SPX, +1.03%  gained 15 points, or 0.8%, to 1,964, with all 10 main sectors trading higher. The Dow Jones Industrial Average DJIA, +0.90%  added 100 points, or 0.6%, to 16,454. The Nasdaq Composite COMP, +0.78%  rose 20 points, or 0.4%, to 4,770.

Gains on Wall Street follow an upbeat session in Europe, while the volatile Chinese markets are closed for two days.

“China’s holidays came at a good time, as markets are able to pause after brutal selloffs last week,” said Michael Antonelli, equity sales trader at R.W Baird & Co.

“Trading is less crazy this week, which could be due to a combination of closed markets in China and an upcoming long holiday weekend here,” Antonelli said.

On Thursday, stock markets in the world’s second-largest economy were closed for China’s World War II victory day parade, providing “much desired respite from the economy and market that has been at the heart of the elevated global volatility of late,” said analysts at Accendo Markets in a note.

Treasury Secretary Jacob Lew said in a CNBC interview aired Thursday morning that he is keeping a “careful eye on market volatility” and looking at any related risk to the U.S. economy.

 

U.S. data: Wednesday’s private-sector jobs report as well as jobless claims point to improving labor market and set the tone to Friday’s official payrolls.

The number of people who applied for U.S. unemployment benefits rose at the end of August to the highest level in two months, but initial claims are still at very low levels that indicate companies aren’t laying off many workers.

The U.S. trade deficit fell by 7.4% in July to a seasonally adjusted $41.9 billion, mainly because of lower imports such as cellphones and pharmaceutical products.

The Institute for Supply Management said on Thursday its services index slipped in August but to a very strong reading indicating growth in the sector. The services index fell to 59% in August from 60.3% in July.

“The headlines numbers have stayed the same for a long time. Claims have averages at 285,000, non-farm payrolls averaged between 185,000 and 220,000, PMI’s hovered near 51 - it’s a slow growth environment. The Federal Reserve wants to raise rates for reasons other than economic data,” said Antonelli.

Movers and shakers: L Brands Inc. LB, +4.97%  shares climbed 3.4% after the retailer said its August sales rose from the previous year, with same-store sales topping Wall Street forecasts.

Shares of Frontier Communications Corp. FTR, +3.79%   jumped 4.6% after Federal Communications Commission approved its acquisition of Verizon’s Wireline operations In California, Florida And Texas.

Joy Global Inc. JOY, -16.09%  plummeted 18% after the company reported worse-than-expected quarterly profit and revenue as weak demand for commodities continues to batter the mining-equipment maker.

Geron Corp. GERN, +19.67%  surged 18% after the biotech company late Wednesday said the New England Journal of Medicine was going to publish two papers showing positive results for its drug imetelstat.

Lannett Co. Inc. LCI, +15.06%  jumped 15% after the pharmaceutical company said it’ll buy UCB SA’s UCB, +2.68%  Kremers Urban Pharmaceuticals Inc. for $1.23 billion.

Other markets: Asian markets closed mostly higher, inspiring gains across Europe’s equity benchmarks as well. Markets in Shanghai and Hong Kong were closed for a two-day holiday to mark the 70th anniversary of the end of the World War II.

Crude oil CLV5, +0.00%  rose nearly 2% adding to a 1.9% gain from Wednesday.

Gold GCZ5, -0.51%  also dipped, while the dollar DXY, +0.39%  traded mixed against other major currencies.