By Wallace Witkowski and Anora Mahmudova, MarketWatch
ECB's Draghi says central bank will 'fully implement'
asset-buying program
U.S. stocks rose for a second-straight session Thursday after
dovish comments from European Central Bank President Mario Draghi
as well as domestic economic reports helped lift the market
higher.
But they struggled to hold on to gains as a pullback in oil
prices forced energy stocks lower.
All the main indexes were coming off their highs. The S&P
500 gained 5 points, or 0.3%, to 1,954. Earlier, the index was up
by as much as 26 points.
"Oil rallied pretty nicely, but when you look at it retreating,
that's pulling down energy stocks," said Robert Pavlik, chief
market strategist at Boston Private Wealth.
Crude oil rose prices rose as high
(http://www.marketwatch.com/story/crude-oil-prices-edge-lower-in-calmer-trading-2015-09-03)as
$48.42 earlier in the day, adding to a 1.9% gain from Wednesday,
(http://www.marketwatch.com/story/brent-back-below-50-as-oil-prices-keep-sliding-2015-09-02)
but retreated back below $47 and weighed upon energy stocks,
turning one of the best performing sectors on the day into one of
the worst.
The Dow Jones Industrial Average was up 41 points, or 0.3%, at
16,393 but had been up as much as 199 points earlier. Meanwhile,
the Nasdaq Composite Index struggled to stay in positive territory,
shedding 3 points, or 0.1% in the afternoon, to trade at 4,747. The
tech-heavy index had seen a 50-point rise earlier.
A move higher in stocks had come as Draghi at a Thursday news
conference
(http://blogs.marketwatch.com/thetell/2015/09/03/ecb-live-blog-will-china-worries-falling-oil-spark-more-easing/)
reasserted the central bank was ready to "fully implement" its
asset-buying program, which is scheduled to run until Sept. 16 "or
beyond" if necessary. However, he said the committee did not
discuss "increasing the size or pace of purchases."
While there had been some risk that Draghi wouldn't take the
easing plan to the next level, the news was welcome to investors as
a sign that the central banker was committed to driving the
economic recovery in Europe, said Mark Luschini, chief investment
strategist at Janney Montgomery Scott.
"Draghi's action shows [the ECB is] flexible with what they are
willing to do," Luschini said.
Thursday's gains follow an upbeat session in Europe, while the
volatile Chinese markets are closed for two days.
"Trading is less crazy this week, which could be due to a
combination of closed markets in China and an upcoming long holiday
weekend here," said Michael Antonelli, equity sales trader at R.W
Baird & Co.
On Thursday, stock markets in the world's second-largest economy
were closed for China's World War II victory day parade
(http://www.marketwatch.com/story/china-to-close-stock-market-to-honor-world-war-ii-anniversary-2015-09-01),
providing "much desired respite from the economy and market that
has been at the heart of the elevated global volatility of late,"
said analysts at Accendo Markets in a note.
"China has certainly been a contributing factor for the selloff,
so they fact that we're not getting any news from them rendered it
quiet for the time being," said Luschini. Plus, the disappointing
manufacturing purchasing managers data out of China
(http://www.marketwatch.com/story/china-factory-activity-slips-to-3-year-low-2015-09-01)
may have been in part to the closure of factories in advance of
China's big military parade
(http://www.marketwatch.com/story/chinas-president-talks-peace-but-parade-showcases-military-might-view-from-tiananmen-square-2015-09-03),
just like factories had been closed for the Beijing Olympics, he
said.
Treasury Secretary Jacob Lew said in a CNBC interview aired
Thursday morning that he is keeping a "careful eye on market
volatility"
(http://www.marketwatch.com/story/treasurys-lew-stress-in-financial-markets-no-cause-for-immediate-concern-2015-09-03-6912647)
and looking at any related risk to the U.S. economy.
Read: As investors flee China, they should consider India
(http://www.marketwatch.com/story/as-investors-flee-china-they-should-consider-india-2015-09-02)
U.S. data: Wednesday's private-sector jobs report as well as
jobless claims point to an improving labor market and set the tone
to Friday's official payrolls.
The number of people who applied for U.S. unemployment benefits
(http://www.marketwatch.com/story/jobless-claims-rise-to-two-month-high-2015-09-03)rose
at the end of August to the highest level in two months, but
initial claims are still at very low levels, indicating companies
aren't laying off many workers.
The U.S. trade deficit fell by 7.4% in July to a seasonally
adjusted $41.9 billion, mainly because of lower imports such as
cellphones and pharmaceutical products.
The Institute for Supply Management
(http://www.marketwatch.com/story/ism-services-index-slows-in-august-but-tops-forecast-2015-09-03)
said on Thursday its services index slipped in August but to a very
strong reading indicating growth in the sector. The services index
fell to 59% in August from 60.3% in July
(http://www.marketwatch.com/story/ism-services-index-surges-to-10-year-high-in-july-2015-08-05).
"The headlines numbers have stayed the same for a long time.
Claims have averages at 285,000, non-farm payrolls averaged between
185,000 and 220,000, PMI's hovered near 51 - it's a slow growth
environment. The Federal Reserve wants to raise rates for reasons
other than economic data," said Antonelli.
Movers and shakers: L Brands Inc. (LB) shares climbed 4.2% after
the retailer said its August sales rose from the previous year,
with same-store sales topping Wall Street forecasts.
Shares of Frontier Communications Corp.(FTR) jumped 5.8% after
Federal Communications Commission approved its acquisition of
Verizon's Wireline operations In California, Florida And Texas.
Joy Global Inc.(JOY) plummeted 16% after the company reported
worse-than-expected quarterly profit and revenue as weak demand for
commodities continues to batter the mining-equipment maker.
Geron Corp.(GERN) surged 12% after the biotech company late
Wednesday said the New England Journal of Medicine was going to
publish two papers showing positive results for its drug
imetelstat.
Lannett Co. Inc.(LCI) jumped 13% after the pharmaceutical
company said it'll buy UCB SA's (UCB.BT) Kremers Urban
Pharmaceuticals Inc. for $1.23 billion
(http://www.marketwatch.com/story/lannett-to-acquire-ucbs-kremers-urban-unit-2015-09-02-184854134).
Other markets: Asian markets closed mostly higher
(http://www.marketwatch.com/storyno-meta-for-guid), inspiring gains
across Europe's equity benchmarks
(http://www.marketwatch.com/story/european-markets-rise-as-investors-wait-for-qe-hints-from-draghi-2015-09-03)
as well. Markets in Shanghai and Hong Kong were closed for a
two-day holiday to mark the 70th anniversary of the end of the
World War II.
Gold
(http://www.marketwatch.com/story/gold-retreats-as-focus-turns-to-jobs-report-us-economy-2015-09-03)
also dipped, while the dollar gained against most other major
currencies.
--Sara Sjolin in London contributed to this article.
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(END) Dow Jones Newswires
September 03, 2015 13:47 ET (17:47 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.