Wall St climbs after two-day drop, but Draghi caps gains

ECB President said central bank's policy would remain accommodative for as long as needed, but that the Governing Council ruled out lowering deposit rate

US stocks advanced Thursday as investors bought shares offering value after a two-day drop, though gains were limited by comments from European Central Bank President Mario Draghi.

Stock index futures had erased earlier gains to turn negative before the market's opening as Draghi spoke at an ECB news conference, saying ECB policy would remain accommodative for as long as needed, but that the Governing Council ruled out lowering the bank's deposit rate into negative territory.

"It is troubling when you get a nine-, 10-point reversal in futures prior to the opening, but it is certainly central banker-driven, whether it is the ECB, Bank of Japan, the Fed, that is what dictates the market direction," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

"Sooner or later these central bankers have to cut the cord and when they do, then the market will stand on its own."

The S&P 500 dropped more than 1% Wednesday and has lost 1.9% over the past two sessions amid concerns the US Federal Reserve may scale back its bond-buying stimulus before the economy is strong enough to stand on its own.

The two-day drop for the benchmark S&P index was the worst back-to-back performance since a 2.1% decline in mid-April.

Ahead of Friday's payrolls report, economic data showed weekly initial claims for state unemployment benefits declined 11,000 to a seasonally adjusted 346,000. Economists in a Reuters survey had forecast a total of 345,000 new filings compared with 354,000 in the prior week.

"If you are bullish and you think it's a better than expected number tomorrow, you are putting some money to work, if you are worried the jobs numbers are going to be soggy, you are staying put for now," said Joseph Quinlan chief market strategist at Chief Market Strategist at US Trust, Bank of America Private Wealth Management in New York.

Wednesday's ADP National Employment report showed private employers accelerated hiring in May from the prior month, but the gains fell short of expectations.

The S&P 500 had run up to a record high on May 21, partly fueled by the belief that softer economic data would ensure the Fed would keep its stimulus measures in place, as opposed to scaling them back earlier than expected.

The Dow Jones industrial average gained 22.58 points, or 0.15%, to 14,983.17. The Standard & Poor's 500 Index rose 4.02 points, or 0.25%, to 1,612.92. The Nasdaq Composite Index climbed 13.94 points, or 0.41%, to 3,415.42.

Retailers will be eyed as they report monthly sales results. Costco Wholesale Corp edged up 0.8% to $110.04 after it reported May same-store sales that missed analyst estimates, due to a relatively stronger dollar and weak gasoline prices. The S&P retail index <.SPXRT> was off slightly, down 0.04%.

The Nasdaq moved higher, boosted by gains in networking stocks such as Ciena Corp , which jumped 14% to $18.60 after the company reported a surprise second-quarter profit on an adjusted basis and forecast stronger-than-expected revenue for the current quarter.

Fellow network equipment maker Cisco Systems Inc rose 1.2% to $24.60 as one of the biggest boosts to the Nasdaq 100 index. The NYSE Arca network index advanced 2.6%.