U.S. stocks rallied for a third consecutive day on more positive news out of Europe.
The S&P 500 Index rose 13.87 points, or 1.21 percent, to trade at 1,157.90 at 2:09 p.m. ET. The Dow Jones Industrial Average rallied 120.11 points, or 1.10 percent, to trade at 11,060.06. The Nasdaq Composite climbed 1.33 percent.
The euro has rallied over 100 pips against the U.S. dollar since the beginning of the New York session.
Before the U.S. opening, the European Central Bank (ECB) re-introduced two liquidity measures to support the European financial system: one-year loans and 40 billion euros worth of covered bond purchases.
The ECB did disappoint some investors by not cutting interest rates. However, outgoing ECB Chief Jean-Claude Trichet acknowledged that he and his colleagues discussed the idea of rate cuts, thus leaving the door open to for the ECB to cut rates in subsequent meetings.
On Tuesday, the Financial Times reported that Eurozone authorities were discussing ways to recapitalize European banks and sparked a big rally in global risk-assets that day.
To be sure, cash bailouts and liquidity injections are only temporary solutions to the European debt crisis. However, such moves to avert an imminent European banking crisis seemed to have calmed investors for now.
U.S. economic data was also positive.
Wednesday’s ADP September private payrolls report and Thursday’s weekly initial jobless claims report both came in above analyst expectations, which comforted investors ahead of Friday’s all-important Bureau of Labor Statistics (BLS) September jobs report.