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Stocks Soar on ECB Bond-Buying Plans, Jobs Report Optimism

Stocks in this article: AMZN SVU NAV PAY OCZ MW

The ECB announced earlier Thursday that it would leave its benchmark rate unchanged at 0.75%.

The central bank also cut its outlook on the eurozone economy, predicting it will contract by between 0.2% and 0.6% this year. It also reduced its growth forecasts for next year.

A spate of uplifting datapoints on U.S. employment was released before the opening bell, prompting many economists to re-evaluate their gloomy outlook for Friday's nonfarm payrolls report for August.

"All this evidence suggests that our forecast of a 100,000 increase in August's official non-farm payroll employment measure may be too pessimistic," said Paul Ashworth, chief U.S. economist at Capital Economics.

Still, "we wouldn't expect this improvement to persuade the Fed to hold fire next week. Employment would need to grow by a lot more than 200,000 per month to bring the unemployment rate down at a pace more agreeable to the Fed," Ashworth continued.

"This surely will tilt expectations to the upside for tomorrow's employment report," said Dan Greenhaus, chief global strategist at BTIG.

The ADP report Thursday showed that employment in the U.S. nonfarm private business sector rose to 201,000 in August, up from an upwardly revised 173,000 in July. Economists forecast that private-sector employment fell to 143,000 last month.

The Labor Department said that initial jobless claims for the week ended Sept. 1 fell by 12,000 to 365,000, and that the four-week moving average rose 250 to 371,250.

Continuing claims for the week ended Aug. 25 fell to 3.322 million from 3.328 million the prior week.

Economists predicted that initial jobless claims would fall to 373,000 and that continuing claims would dip to 3.3 million.

Adding to the uplifting employment reports, consulting firm Challenger, Gray & Christmas said that planned layoffs dropped in August to a 20-month low.

In more positive data, the Institute for Supply Management said that its ISM Non-Manufacturing Index came in at 53.7 in August, better than the 52.4 economists were expecting.

The FTSE in London finished up 2.11%, while the DAX in Germany rose 2.91%.

The Hong Kong Hang Seng index tacked on 0.34% and the Nikkei in Japan closed up 0.01%.

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