New York, Sept. 6 (Reuters): The S&P 500 rose to its highest level in more than four years and European blue-chip stocks jumped after the European Central Bank (ECB) announced an aggressive bond-buying programme to halt the spread of the Eurozone’s debt crisis.
The euro gained against the dollar after ECB president Mario Draghi said the central bank would undertake unlimited, short-dated bond purchases to ease funding pressures on governments that sought help. Draghi said the ECB would not expect better treatment than other creditors in the case of a default.
But the single currency’s gains were limited as strong US private sector job data ahead of Friday’s closely watched government employment report boosted the greenback and sent it surging against the Japanese yen.
The Euro STOXX 50 index of Eurozone blue-chip stocks jumped about 3.4 per cent to its highest level since early April. On Wall Street, the S&P 500 jumped nearly 2 per cent to reach its highest level since May 2008.
“Clearly, the announcement of the ECB... as well as the very encouraging job data here domestically helped fuel an already buoyant market,” said Joseph Greco, managing director at Meridian Equity Partners in New York.
Investors have been expecting an ECB bond purchase plan for weeks, and the details Draghi announced at a news conference were largely in line with expectations.
The euro was last up 0.2 per cent at $1.26, off an earlier low at $1.25. The dollar surged 0.7 per cent against the yen.
US private employers added a stronger-than-expected 201,000 jobs in August, according to payrolls processor ADP, while the government said new claims for jobless benefits fell last week to the lowest level in a month — upbeat signals for a struggling labour market.