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Stocks rise after ECB vows to lower interest rates

(AP) NEW YORK - Stocks soared in the U.S. and Europe Thursday after the European Central Bank president vowed to "do whatever it takes" to preserve the continent's monetary union.

The Dow Jones industrial average rose 212 points to close at 12,288, following European markets sharply higher. Benchmark indexes in Spain and Italy each jumped 5 percent. France's stock market surged 3 percent. In other U.S. trading, the Standard & Poor's 500 index ended at 1,360, up 22 points, and the Nasdaq composite index rose 39 points to 2,893.

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

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After insisting for months that it was up to governments to restore confidence in the euro, Draghi's 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, the euro surged against the dollar and the yield on the 10-year Treasury note rose. Borrowing costs for Spain and Italy fell sharply.

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 Europe, Draghi's comments came after days of uncertainty and rising concern over Spain's recession and banking industry, which is reeling following the implosion of a real estate bubble. As borrowing costs for both Spain and Italy rose in the past week, investors feared that both countries might need to be rescued, as Greece, Portugal and Ireland have been.

The borrowing costs for Spain's government plunged following Draghi's comments as investors anticipated that the European Central Bank might step up its purchases of Spanish government bonds.

The yield on Spain's benchmark 10-year bond dropped almost half a percentage point, an enormous move, to 6.93 percent. That rate surged as high as 7.54 percent this week as investors dumped the country's bonds and lost confidence in Spain's ability to manage its debts.

Technology companies continued to report disappointing earnings following industry leader Apple's rare earnings disappointment earlier this week.

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