World and Nation

Enthusiasm in Europe helps lift US stocks

Decisive moves by the head of the European Central Bank to preserve the eurozone pushed the benchmark U.S. stock index to a four-year high Thursday and fueled hopes that the rally may have staying power.

The markets have greeted several previous efforts to solve Europe’s economic woes with euphoria, only to be quickly deflated. While there could be some setbacks along the way this time, too, investors suggested that the enthusiasm may not be fleeting. They showed a willingness to dive back into stocks and risky Spanish and Italian bonds and sold safer assets like Treasury bonds. The Standard & Poor’s 500 index surged nearly 2 percent, surpassing the peak reached earlier this year, hitting a level last seen in January 2008, before the financial crisis. The Nasdaq composite index rose to its highest point since 2000.

Stocks in the U.S. were also helped by promising data about the U.S. employment picture, ahead of Friday’s highly anticipated jobs report.

A weak employment number could easily derail investor optimism. But on Thursday, investors were captivated by the ECB president Mario Draghi’s announcement that he is ready to launch a bond-buying program that will provide what he said was a “fully effective backstop” for the struggling euro.

“The central bank is clearly prepared to tackle the problem head on,” said Bernard Baumohl, the chief global economist at The Economic Outlook Group. “I think people will grow more encouraged that we are finally seeing the light at the end of this tunnel.”

The markets have been moving up since Draghi announced his intention to do “whatever it takes” to save the eurozone in late July. Since then, the eurozone’s blue chip index, euro Stox 50, has risen nearly 10 percent, bringing it up over 20 percent for the summer. The index leapt 3.4 percent on Thursday.

The plan Draghi announced was not much different than what investors had been anticipating. But the full details he provided displayed the breadth of measures he is ready to take.