Stocks: Thursday’s review

European stocks rallied the most in a month after European Central Bank President Mario Draghi said policy makers agreed to an unlimited bond-purchase program as they try to regain control of interest rates in the euro area.

The ECB program “will enable us to address severe distortions in government bond markets which originate from, in particular, unfounded fears on the part of investors of the reversibility of the euro,” Draghi said at a press conference in Frankfurt. “Under appropriate conditions, we will have a fully effective backstop to avoid destructive scenarios with potentially severe challenges for price stability.”

National benchmark indexes climbed in all 18 western- European markets, and all 19 industry groups in the Stoxx 600 advanced. Germany’s DAX rallied 2.9 percent and the U.K.’s FTSE 100 gained 2.1 percent. France’s CAC 40 jumped 3.1 percent.

A gauge of banks had the biggest gain among 19 industry groups in the Stoxx 600, rising 4.4 percent. UniCredit, Italy’s largest lender, advanced 8.1 percent to 3.51 euros and France’s Societe Generale rallied 7.8 percent to 22.93 euros. Banco Espirito Santo SA surged 8.3 percent to 61.3 euro cents in Lisbon.

Nokia Oyj, the mobile-phone maker that lost more than 95 percent of market value since 2007, dropped 2.9 percent to 1.93 euros after the stock was cut to sell from hold at Deutsche Bank AG. The shares sank 13 percent yesterday after the company unveiled two smartphones using Microsoft Corp.’s new Windows Phone software.

The Standard & Poor’s 500 Index rallied to the highest level since 2008 as the European Central Bank announced specifics of its bond-buying plan and data boosted optimism in the American economy.

Draghi said policy makers agreed to an unlimited bond- purchase program as they try to regain control of interest rates in the euro area. He said the ECB will have a “fully effective backstop to avoid destructive scenarios with potentially severe challenges for price stability.” The bond plan is the most ambitious yet in the central bank’s fight to save the euro after nearly three years of turmoil.

Service industries in the U.S. expanded in August at a faster pace than forecast, according to the Institute for Supply Management’s non-manufacturing index. Claims for unemployment benefits fell to the lowest level in a month and American companies added more workers than forecast, separate reports showed today before the Labor Department payrolls data tomorrow.

The government’s employment report may show overall hiring climbed by 130,000 jobs in August while the jobless rate remained at 8.3 percent for a second month, according to the median forecasts by economists . The unemployment rate has stayed above 8 percent since February 2009.