Stocks rally, euro falls as ECB open to more stimulus
By David Gaffen
NEW YORK (Reuters) - Stocks rose in the United States and Europe and the dollar hit a three-week high against the euro after European Central Bank President Mario Draghi said further rate cuts were being considered to stimulate the euro zone economy.
The ECB, as widely expected, took no new steps on Thursday, but Draghi signaled that it could extend its 1 trillion euro bond-buying quantitative easing program if necessary to combat weak inflation.
"We are ready to act if needed ... and we are open to the full menu of monetary policy," Draghi told a news conference.
Worries that global economic growth is slowing, particularly in China, have depressed stock and commodity markets across the world in recent months and prompted a series of downgrades to economic forecasts from the International Monetary Fund and others.
Wall Street rallied, gaining ground after the ECB news and earnings reports that included better-than-expected results from McDonald's Corp (MCD.N: Quote) and weak figures from Caterpillar (CAT.N: Quote).
A global index of equities .MIWD00000PUS rose 0.8 percent.
The Dow Jones industrial average .DJI jumped 320.55 points, or 1.87 percent, to 17,489.16, the S&P 500 .SPX gained 33.57 points, or 1.66 percent, to 2,052.51 and the Nasdaq Composite .IXIC added 79.93 points, or 1.65 percent, to 4,920.05.
The dollar rose 1.4 percent against a basket of currencies .DXY. The U.S. unit has been losing ground in the past month as expectations waned for an interest rate hike this year by the Federal Reserve. Continued...