Wall Street jumps after Draghi comments on saving Euro

European Central Bank President has said ECB will do whatever it takes to preserve euro

Wall Street jumped on Thursday after remarks by Europe's central bank chief about protecting the euro zone from collapse helped reassure a market already expecting the U.S. Federal Reserve to step up stimulus efforts.

European Central Bank President Mario Draghi pledged on Thursday to do whatever was necessary to protect the euro zone from collapse, including fighting unreasonably high government borrowing costs. The comments caused an immediate spike in global stock and commodity markets.

Policy makers have made similar statements about saving the euro before, but if these latest remarks are realized in decisive intervention in European bond markets or other stimulative measures, i nvestors hope it could spur a sizable "risk-on" rally in stocks.

Shares in sectors more sensitive to risks in Europe and slowness in the economy, such as materials and financials, led the market higher. Morgan Stanley shares rose 2.3 percent to $13.27.

"The overarching concern over the last week or so has been that the euro zone is slowly melting into the Mediterranean," said Art Hogan, managing director of Lazard Capital Markets in New York. "To have Draghi come out and say, listen we are keeping this together ...is going to add support to the market that is otherwise not there.

"Remember, though, that the ECB can't do this alone; he's going to have to have support from Germany and we'll see if that's forthcoming," said Hogan.

In a reassuring sign on the economy, the number of Americans filing new claims for jobless benefits fell last week to near a four-year low, a hopeful indication for a labor market that has shown signs of weakness.

The Dow Jones industrial average gained 182.40 points, or 1.44 percent, to 12,858.45. The Standard & Poor's 500 Index rose 16.36 points, or 1.22 percent, to 1,354.25. The Nasdaq Composite Index g 46.66 points, or 1.63 percent, to 2,900.90.

Hopes that the Federal Reserve will boost efforts to stimulate a flagging economy, maybe with a decision to do so as early as at its rate-setting meeting next week, soothed concerns about the economy and offset the impact of what investors describe as a "mixed" corporate earnings season.

Shares in Sprint Nextel Corp jumped 16 percent after the company posted earnings. Net operating revenue rose to $8.8 billion from $8.3 billion. Analysts expected $8.727 billion, according to Thomson Reuters I/B/E/S.

If the move higher by the market is sustained through the trading day it will lift the S&P 500 away from a technically important level around 1,333, which if breached may lead to further losses. The level marks a convergence of several technical factors, including the index's 50-day moving average.

"Finally the markets have forced the ECB and the euro group leaders to begin to make statements that the market really wants to hear," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

"This time he's being more decisive and using more challenging words; yes, he's said before that the euro is irreversible, but today he says it's irreversible and we will make it irreversible," said Cardillo.

With around two-fifths of S&P 500 companies reporting earnings as of Wednesday, 65 percent have beat Wall Street's profit estimates. However, three in five companies missed revenue estimates, with many pointing to a weakening global economy.

Dow Chemical Co , the largest U.S. chemical maker by sales, reported a lower-than-expected quarterly profit on Thursday as demand for chlorine, plastics and electronic parts plunged around the world. The shares fell 2.4 percent to $29.55.

(Editing by Bernadette Baum, Dave Zimmerman)