U.S. Stocks Rise as ECB’s Draghi Vows to Defend Euro

U.S. stocks gained, snapping a four- day drop in the Standard & Poor’s 500 Index, as European Central Bank President Mario Draghi pledged to defend the euro while American jobless claims fell and durable-goods orders rose.

Sprint Nextel Corp. surged 16 percent as sales at the wireless carrier beat analysts’ estimates. Visa Inc. (V), the world’s largest payments network, rose 2.6 percent on better- than-estimated earnings. Zynga Inc. (ZNGA), the biggest developer of games played on Facebook Inc.’s social network, plunged 38 percent amid disappointing profit and revenue. Facebook slumped 5.3 percent before reporting its quarterly results.

The S&P 500 rose 1.7 percent to 1,360 at 9:40 a.m. New York time. The benchmark index for American equities lost 2.8 percent in the previous four days. The Dow Jones Industrial Average added 214.11 points, or 1.7 percent, to 12,890.16.

“We’re seeing another instance of central bankers trying to save the day with the threat of their printing machine,” Peter Boockvar, equity strategist at Miller Tabak & Co. in New York, wrote in a note today. “Whenever Draghi talks about ’policy transmission’ being hampered, it’s his Morse code for restarting their bond buying program.”

Global stocks rallied as Draghi suggested policy makers may intervene in bond markets as surging yields in Spain and Italy threaten the existence of the 17-nation currency bloc. The ECB mothballed its bond-buying program in March as it pushed governments to do more to control their deficits.

In the U.S., fewer people than forecast filed first-time claims for unemployment insurance payments last week. Orders for U.S. durable goods climbed more than projected in June as a surge in demand for aircraft and military hardware overshadowed a slump in business equipment spending.

By Rita Nazareth
Read More: Bloomberg