ET, the Dow Jones industrial average and S&P 500 are slightly positive — and thus above their record closing highs set Wednesday — while the Nasdaq composite is down fractionally.
The four-week moving average of jobless claims, which smooths out weekly fluctuations, fell to 279,000, its lowest level since April 2000.
In another good sign for the U.S. economy, non-farm productivity in the third quarter came in at annualized rate of 2%, topping forecasts.
Europe benchmarks took huge, initial leaps of 3% or so on news of regionwide stimulus, but the gains eased as the trading day wore on. Currently the DAX of Germany is in a 0.8% climb, the CAC 40 of France is up 0.4% and Britain’s FTSE is flat.
The European Central Bank is leaving rates unchanged at record lows, the agency announced Thursday.
But the big news came in the press conference afterward.
In a prepared statement, ECB President Mario Draghi gave investors more color on its latest stimulus plans announced on Oct. 2. Draghi said the ECB started buying covered bonds last month and would “soon start to purchase asset-backed securities.”
Draghi said the new programs, which are designed to lower borrowing, stimulate the economy and try to boost dangerously low inflation, will last for at least two years.
More importantly, and which was perceived as very bullish by Wall Street, Draghi said the asset purchases will have a “sizeable impact on our balance sheet, which is expected to move towards the dimensions it had at the beginning of 2012.”
Draghi also said if economic conditions persist and the current programs don’t boost the economy as much as the ECB hopes, the ECB will do more.
“Should it become necessary to further address risks of too prolonged a period of low inflation, the (ECB) is unanimous in its commitment to using additional unconventional instruments within its mandate.”
That comments suggests that the ECB will remain easy for years to come and that purchases of Eurozone government bonds may still occur.
Following Draghi’s comments, the euro headed lower vs. the U.S. dollar, and at its low yield today of 1.2405 — hit a fresh 52-week low yield.)
In recent days, according to Bespoke Investment Group, there had been speculation that Draghi is facing “widespread dissent” within the ECB Council. Central bankers in some European countries, including Germany, are not happy with the ECB’s policy decisions to expand its balance sheet, via “expanded lending” and purchases of asset backed securities.
Stocks powered higher on Wednesday as investors reacted to the GOP sweep of Congress, a political development that Wall Street perceives as bullish due to the Republican’s reputation for favoring more growth-focused economic policies, such as lower taxes and less onerous regulations on big business.
The Dow and S&P 500 both hit record highs Wednesday, with the blue-chip Dow notching its 20th record close of 2014 and the large-company S&P 500 closing at its 36th record of the year.
Wall Street is also heading into a seasonal sweet spot for stock price performance. As November kicks off what historically has been the best six-month stretch for stocks. Stocks also have a history of taking off in the final quarter of mid-term election years.