NEW YORK ( TheStreet) -- Morgan Stanley ( MS) was the winner among the nation's largest banks on Thursday, with shares rising 2% to close at $22.29. The European Central Bank on Wednesday announced it would cut its main rate for Eurosystem refinancing operations by 25 basis points to 0.50%. Mario Draghi, the president of the European Central Bank, at a press briefing said "our monetary policy stance will remain accommodative for as long as is needed." Anything that stimulates economic activity in Europe is good news for Morgan Stanley. The investment bank reported that as of March 31, its net risk exposure to "European peripherals," including Greece, Ireland, Italy, Spain and Portugal totaled $5.0 billion. The largest exposure among the peripherals was $2.7 billion in Italy, mainly to non-sovereign entities, followed by $1.7 billion in Spain, nearly all of which was to non-sovereign entities. Morgan Stanley also reported $2.3 billion in net risk exposure in France. The ECB move followed a slight but important change in language in the Federal Open Market Committee's statement following its two-day meeting. In its statement on Wednesday afternoon, the FOMC as expected said that the short-term federal funds rate would remain in a range of zero to 0.25%, where it has been since the end of 2008. The Federal Reserve will also continue to make monthly purchases of its monthly purchases of $45 billion in long-term U.S Treasury securities, and $40 billion in agency mortgage-backed securities. But the FOMC also said the Fed was "prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes." The language in previous statements didn't include the words "increase or reduce." KBW analyst Brian Gardner in a note to clients late on Wednesday said the change in language indicated that "despite comments from some of the more hawkish Federal Reserve Bank presidents, the FOMC is unlikely to slow the pace of purchases in the near future."
The Dow Jones Industrial Average and S&P 500 Index ( SPX.X) each ended with gains of nearly 1%, while the NASDAQ Composite Index was up 1.3%. Investors were in cheerful mood following two economic reports showing positive employment trends, after Wednesday's private-sector employment report from Automated Data Processing showed a significant slowdown in employment growth in April.