Stocks rally, euro plummets on Europe stimulus plan

NEW YORK — A plan to revive Europe’s sagging economy rippled through the financial world on Thursday, setting off a rally in the stock market that wiped out its losses for the year.

The pledge by the European Central Bank to spend 1.1 trillion euros on bonds knocked down government borrowing rates across Europe and drove the euro to its lowest level against the dollar in 11 years. For investors, the long wait for action in Europe was over.

“It’s all about the ECB today,” said Jeff Kravetz, regional investment strategist at U.S. Bank Wealth Management. “This is a very positive development. They have a reputation of overpromising and under-delivering, and today they delivered.”

The Standard & Poor’s 500 index jumped 31.03 points, or 1.5 percent, to close at 2,063.15. That nudged it into positive territory for the year, up 0.2 percent.

The Dow Jones industrial average climbed 259.70 points, or 1.5 percent, to 17,813.98 while the Nasdaq climbed 82.98 points, or 1.8 percent, to 4,750.40.

The ECB announced Thursday that it would start buying 60 billion euros worth of government and private bonds every month, slightly more than what many in the markets anticipated.

The central bank said the program will run 18 months, from this March until September of next year, but left open the option of extending the program if necessary.