US stocks rode a wave of hope inspired by comments from European Central Bank President Mario Draghi yesterday, ignoring mixed corporate results to focus on the strongest signal yet of the ECB’s intentions to protect the Eurozone.
Draghi hinted the ECB would target high sovereign bond yields, a measure the ECB has been reluctant to take in the past. Policymakers have made similar statements about saving the euro before, but if these remarks result in decisive action in European bond markets, it could spur a sizable rally in stocks.
Shares in sectors more sensitive to risks in Europe and economic demand, such as energy-related stocks and industrials, were among the day’s best performers, with the S&P 500 energy index up 2.7 per cent. Diversified manufacturer 3M, whose stock rose 2.1 per cent to $90.59 after its results beat estimates, helped boost the Dow and was among the brighter spots of the earnings season.
Zynga shares ended down 37.5 per cent at $3.17 after hitting an all-time low, a day after the company slashed its profit outlook after fading enthusiasm for its games on Facebook. After the closing bell, shares of Facebook tumbled 11 per cent to $23.87 after reporting its first quarterly results since Facebook’s market debut.
The Dow Jones industrial average was up 211.88 points, or 1.67 per cent, at 12,887.93. The Standard & Poor’s 500 Index was up 22.13 points, or 1.65 per cent, at 1,360.02. The Nasdaq Composite Index was up 39.01 points, or 1.37 per cent, at 2,893.25.