Stocks soar after ECB unveils bond buying effort

NEW YORK (AP) ? Financial markets soared Thursday 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 above where it was before the Great Recession. The Dow Jones industrial average soared nearly 200 points, European markets shot higher and 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 Thursday 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 Dow Jones industrial average surged 190 points to 13,237 as of 10:20 a.m. Big banks led the way higher. Both Bank of America and JPMorgan Chase rose more than 3 percent.

The Standard & Poor’s 500 index rose 18 points to 1,422. If the index closes above 1,419, a peak reached in April, it would be the highest close since May 2008.

The Nasdaq composite rose 39 points to 3,109.

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.

Traders dropped U.S. Treasury bonds, considered one of the world’s safest places to stash money, and the drop in demand lifted yields. The yield on the 10-year Treasury rose to 1.66 percent, up from 1.60 percent late Wednesday.

The Labor Department said the number of people applying for unemployment benefits fell by 12,000 last week to 365,000. That figure won’t affect the August jobs report, due out Friday, but could be a sign of a better hiring this month.

The stock market’s early gains turned both the Dow and the S&P 500 positive for the week. Both are now up 1.1 percent.

The Dow is now within striking distance of its closing high for the year: 13,279, reached May 1.