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Stocks soar after ECB unveils bond buying effort

Thursday, September 6, 2012

Stocks soar after ECB unveils bond buying effort

NEW YORK (AP) — Financial markets are soaring after investors finally heard what they had been waiting for from the European Central Bank: concrete plans to support struggling countries in the region by buying government bonds.

The surge put the Standard & Poor’s 500 index back to its highest level since May 2008, before the financial crisis began. The Dow Jones industrial average surged more than 200 points. European markets also shot higher. Treasury bond prices and the dollar dropped as investors sold low-risk investments.

Mario Draghi, the European Central Bank’s president, unveiled a new program today to buy government bonds from the region’s struggling countries with the aim of lowering their borrowing costs. Mario Draghi said the program will have no set limit on how much it can buy.

The Standard & Poor’s 500 index rose 24 points to 1,427 as of 10:50 a.m. If the index closes above 1,419, it would be the highest close since May 2008.

The Dow Jones industrial average surged 225 points to 13,272. The Dow is now within striking distance of its closing high for the year: 13,279, reached May 1.

The Nasdaq composite jumped 53 points to 3,122.

European stock markets also jumped in response to Draghi’s announcement. Germany’s DAX gained and France’s CAC-40 each rose 2.7 percent.