US open: Markets edge forward as ECB announces bond-buying programme

US stocks edged forward on Thursday, buoyed by the European Central Bank’s (ECB) decision to commit to buy government bonds as part of an asset-purchase programmed worth about €1.1trn.

Just after 09:45 in New York, the Dow Jones Industrial Average was up 10.26 points, while the S&P 500 and the Nasdaq rose 0.3% and 0.5% respectively.

ECB president Mario Draghi unveiled plans for a bond-buying programme designed to inject new life into the flagging Eurozone economy. Starting in March, the ECB will buy €60bn worth of private and public securities each month until September 2016.

“Mario Draghi has been left with little choice than to begin a more robust than expected quantitative easing programme in a bid to awake the economies of the Eurozone from their slumber,” said Dennis de Jong, managing director at UFX.com.

“This play is seen by many as the last roll of the dice for the beleaguered euro. Quantitative easing has had some success in the US and UK, but with such a patchwork of economies and banking systems in the Eurozone, the jury is very much out.

“There will be a lot of people holding their breath over the coming months.”

US initial jobless claims fell 10,000 to 307,000 in the week ended 17 January, stabilising above the reading of 300,000 analysts had estimated, while claims for the previous week were revised up to 317,000.

Reflecting the recent volatility, the four-week moving average for initial claims rose from 300,000 to 307,000.

Southwest Airlines rose after reported better-than-expected quarterly profits on the back of greater passenger traffic and a hefty drop in fuel costs.

Covidien and Union Pacific rose 2% and 4% respectively after both beat analysts’ forecast for earnings, while insurance group Travelers rose 1% after posting fourth-quarter profit above Wall Street’s estimates.

Land’s End plummeted by over 20% after the group offered up a disappointing outlook, while eBay rose almost 4% after announcing late on Wednesday that its fourth-quarter results had met expectations.

After the bell on Wednesday, American Express announced its fourth-quarter earnings and revenue both rose but shares fell almost 3% after the group said it will cut 4,000 jobs.

Royal Bank of Canada fell after agreeing to purchase US rival City National Corp. for about $5.4bn, its largest takeover on record.

On the back of Draghi’s announcement, the dollar rose over 1% against the euro, though it lost almost 0.5% against the yen and almost 0.1% against the pound.

The price of West Texas Intermediate fell almost 0.3% to $47.65 a barrel, while Brent crude rebounded slightly and was trading at just over $49 a barrel.