Stocks soar after ECB vows to protect euro

It was the buy signal that markets were waiting for.

When European Central Bank president Mario Draghi vowed to "do whatever it takes" to keep the continent's monetary union intact, stocks were off to races in the U.S. and Europe.

The Dow Jones industrial average on Thursday jumped 211.88 points, or 1.67 percent, to 12,887.93 following big gains in European markets. Benchmark stock indexes in Spain and Italy surged 6 percent and 4 percent in France.

Draghi's comments at an investor conference at the Olympics raised hopes that Europe's central bank might intervene to bring down the cripplingly high borrowing costs for struggling European countries like Spain and Italy.

After insisting for months that it was up to European governments to restore confidence in the currency shared by 17 nations there, Draghi pledged that "the ECB is ready to do whatever it takes to preserve the euro."

In other signs that investors were becoming more confident that Europe's financial crisis would not spin out of control, borrowing costs for Spain and Italy fell sharply, the euro surged a penny to $1.23 against the dollar and the yield on the 10-year Treasury note rose to 1.44 percent from 1.40 percent late Wednesday. Investors tend to sell low-risk assets like Treasurys when they're less fearful about global markets and the economy.

As earnings reports this week from Caterpillar and Ford have shown, Europe's troubles can have a big impact on the results of major U.S. corporations.

The broader Standard & Poor's 500 index rose for the first time in five days. It was up 1.65 percent to 1,360.02. The gains in the U.S. stock market were broad. All 10 of the industry groups in the S&P 500 index rose, led by telecommunications companies.

In other trading, the Nasdaq composite index rose 1.37 percent to 2,893.25, despite more disappointing news from technology companies including the online game maker Zynga.