S&P 500 hits more than 4-yr high after ECB move

Investors laud new bond-buying program in Europe aimed at containing the region's debt crisis

The S&P 500 index leaped to its highest level in more than four years and the Nasdaq jumped 2 percent on Thursday as investors lauded a new bond-buying program in Europe aimed at containing the region's debt crisis and signs of improvement in the U.S. labor market.

The rally was broad, with banks and semiconductor stocks in the lead. Advancers outnumbered decliners by a ratio of more than 4 to 1. The Dow index had its biggest gain in two months as shares of Walt Disney Co hit an all-time high and last rose 1.75 percent to $51.68.

ECB President Mario Draghi, seeking to back up his July pledge to do whatever it takes to preserve the euro, said the central bank's new plan of potentially unlimited bond-buying would address bond market distortions and "unfounded" fears of investors about the survival of the euro.

U.S. companies added staff in August at the fastest clip in five months and a gauge of employment in the service sector also improved, upbeat signals for a struggling labor market. Another report showed new claims for jobless benefits fell last week to the lowest level in a month.

Friday's government payrolls report looms as the next test for markets. Investors will scrutinize the details for clues as to when the Federal Reserve may provide more stimulus to prop up economic growth.

The ECB's plan "is a large and broad program that we think can provide some level of stabilization," said David Carter, chief investment officer at Lenox Wealth Advisors in New York. "However, long-term growth concerns remain."

"Tomorrow's jobs number is really the most relevant number. We're cautiously optimistic."

Even with Thursday's encouraging numbers, economists think the government jobs report will show only modest hiring, with nonfarm payrolls expected to rise 125,000. The unemployment rate is seen holding at 8.3 percent.

The Dow Jones industrial average <.DJI> gained 227.00 points, or 1.74 percent, to 13,274.48, on pace for its best daily percentage rise since June 29. The Standard & Poor's 500 Index <.SPX> gained 26.69 points, or 1.90 percent, to 1,430.13 -- its highest level since May 2008 as the financial crisis began to gather pace. The Nasdaq Composite Index <.IXIC> gained 61.73 points, or 2.01 percent, to 3,130.99.

The ECB's program, which Germany's Bundesbank is known to have opposed, would focus on bonds maturing within three years and was strictly within the ECB's mandate. Draghi said only one member of the ECB Governing Council had dissented.

The ECB also announced that it will keep its main interest rate at a record low of 0.75 percent, holding fire after a pick-up in inflation last month offset pressure to breathe life into the flagging euro zone economy by easing borrowing costs.

In company news, Supervalu Inc said it would close about five dozen stores as it works to turn around its grocery business, which lags Kroger Co and Wal-Mart Stores Inc .

Realty Income Corp plans to acquire American Realty Capital Trust Inc for about $1.93 billion as it looks to diversify its portfolio outside of the retail industry. Shares of Realty Income slipped 0.05 percent to $42.46 and Capital Trust rose 1.9 percent to $12.19.