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Support for Euro Boosts Stocks

European Central Bank stands behind the weakened currency.

The European Central Bank stood firmly behind the shaky euro zone today, boosting stocks in both Europe and the U.S.

 

Mario Draghi, the bank’s president, told the U.K. government’s Global Investment Conference in London that the ECB “is ready to do whatever it takes to preserve the euro.”

 

Markets applauded the news after renewed worries this week that Greece could exit the currency bloc. Spain has also faced escalating fiscal troubles. 

 

On Wall Street, the S&P Retail Index gained 1.4 percent, or 8.60 points, to 611.02, as the Dow Jones Industrial Average increased 1.7 percent, or 211.88 points, to 12,887.93.

 

The fashion gainers included Fifth & Pacific Cos. Inc., up 22 percent to $11.28 after the company posted narrower-than-expected second-quarter losses; Lululemon Athletica Inc., 5.5 percent to$59.47; Michael Kors Holdings Ltd., 4.8 percent to $41.44; Guess Inc., 4.4 percent to $29.35, and Coach Inc., 4.1 percent to $59.72.

 

In Europe, the FTSE MIB in Milan gained the most, surging 5.6 percent to 13,210.04, while the CAC 40 in Paris was up 4.1 percent to 3,207.12. The DAX in Frankfurt rose 2.8 percent to 6,582.96 and the FTSE 100 in London finished up 1.4 percent to 5,573.16.

 

Spain and Italy’s ten-year bond yields fell following Draghi’s comments.

 

Fashion, luxury and retail stocks rose in tandem with the markets. Those that gained the most included Unilever, up 5.4 percent to 27.88 euros, following the firm’s 1.3 percent rise in first-half profits; Safilo Group, 5 percent to 5.13 euros; L’Oreal, 4.4 percent to 97.31 euros, and Carrefour, 4.1 percent to 14.02 euros.

 

The few decliners included French Connection, down 2.5 percent to 19 pence, and Prada, 2.7 percent to 48.70 Hong Kong dollars.

 

The pound traded for $1.55 against the dollar while the euro traded for $1.21. The Swiss franc went for $1.01 and the Hong Kong dollar for $0.12.