By Wallace Witkowski and Anora Mahmudova, MarketWatch

ECB's Draghi says central bank will 'fully implement' asset-buying program

U.S. stocks rose for a second-straight session Thursday after dovish comments from European Central Bank President Mario Draghi as well as domestic economic reports helped lift the market higher.

But they struggled to hold on to gains as a pullback in oil prices forced energy stocks lower.

All the main indexes were coming off their highs. The S&P 500 gained 5 points, or 0.3%, to 1,954. Earlier, the index was up by as much as 26 points.

"Oil rallied pretty nicely, but when you look at it retreating, that's pulling down energy stocks," said Robert Pavlik, chief market strategist at Boston Private Wealth.

Crude oil rose prices rose as high (http://www.marketwatch.com/story/crude-oil-prices-edge-lower-in-calmer-trading-2015-09-03)as $48.42 earlier in the day, adding to a 1.9% gain from Wednesday, (http://www.marketwatch.com/story/brent-back-below-50-as-oil-prices-keep-sliding-2015-09-02) but retreated back below $47 and weighed upon energy stocks, turning one of the best performing sectors on the day into one of the worst.

The Dow Jones Industrial Average was up 41 points, or 0.3%, at 16,393 but had been up as much as 199 points earlier. Meanwhile, the Nasdaq Composite Index struggled to stay in positive territory, shedding 3 points, or 0.1% in the afternoon, to trade at 4,747. The tech-heavy index had seen a 50-point rise earlier.

A move higher in stocks had come as Draghi at a Thursday news conference (http://blogs.marketwatch.com/thetell/2015/09/03/ecb-live-blog-will-china-worries-falling-oil-spark-more-easing/) reasserted the central bank was ready to "fully implement" its asset-buying program, which is scheduled to run until Sept. 16 "or beyond" if necessary. However, he said the committee did not discuss "increasing the size or pace of purchases."

While there had been some risk that Draghi wouldn't take the easing plan to the next level, the news was welcome to investors as a sign that the central banker was committed to driving the economic recovery in Europe, said Mark Luschini, chief investment strategist at Janney Montgomery Scott.

"Draghi's action shows [the ECB is] flexible with what they are willing to do," Luschini said.

Thursday's gains follow an upbeat session in Europe, while the volatile Chinese markets are closed for two days.

"Trading is less crazy this week, which could be due to a combination of closed markets in China and an upcoming long holiday weekend here," said Michael Antonelli, equity sales trader at R.W Baird & Co.

On Thursday, stock markets in the world's second-largest economy were closed for China's World War II victory day parade (http://www.marketwatch.com/story/china-to-close-stock-market-to-honor-world-war-ii-anniversary-2015-09-01), providing "much desired respite from the economy and market that has been at the heart of the elevated global volatility of late," said analysts at Accendo Markets in a note.

"China has certainly been a contributing factor for the selloff, so they fact that we're not getting any news from them rendered it quiet for the time being," said Luschini. Plus, the disappointing manufacturing purchasing managers data out of China (http://www.marketwatch.com/story/china-factory-activity-slips-to-3-year-low-2015-09-01) may have been in part to the closure of factories in advance of China's big military parade (http://www.marketwatch.com/story/chinas-president-talks-peace-but-parade-showcases-military-might-view-from-tiananmen-square-2015-09-03), just like factories had been closed for the Beijing Olympics, he said.

Treasury Secretary Jacob Lew said in a CNBC interview aired Thursday morning that he is keeping a "careful eye on market volatility" (http://www.marketwatch.com/story/treasurys-lew-stress-in-financial-markets-no-cause-for-immediate-concern-2015-09-03-6912647) and looking at any related risk to the U.S. economy.

Read: As investors flee China, they should consider India (http://www.marketwatch.com/story/as-investors-flee-china-they-should-consider-india-2015-09-02)

U.S. data: Wednesday's private-sector jobs report as well as jobless claims point to an improving labor market and set the tone to Friday's official payrolls.

The number of people who applied for U.S. unemployment benefits (http://www.marketwatch.com/story/jobless-claims-rise-to-two-month-high-2015-09-03)rose at the end of August to the highest level in two months, but initial claims are still at very low levels, indicating companies aren't laying off many workers.

The U.S. trade deficit fell by 7.4% in July to a seasonally adjusted $41.9 billion, mainly because of lower imports such as cellphones and pharmaceutical products.

The Institute for Supply Management (http://www.marketwatch.com/story/ism-services-index-slows-in-august-but-tops-forecast-2015-09-03) said on Thursday its services index slipped in August but to a very strong reading indicating growth in the sector. The services index fell to 59% in August from 60.3% in July (http://www.marketwatch.com/story/ism-services-index-surges-to-10-year-high-in-july-2015-08-05).

"The headlines numbers have stayed the same for a long time. Claims have averages at 285,000, non-farm payrolls averaged between 185,000 and 220,000, PMI's hovered near 51 - it's a slow growth environment. The Federal Reserve wants to raise rates for reasons other than economic data," said Antonelli.

Movers and shakers: L Brands Inc. (LB) shares climbed 4.2% after the retailer said its August sales rose from the previous year, with same-store sales topping Wall Street forecasts.

Shares of Frontier Communications Corp.(FTR) jumped 5.8% after Federal Communications Commission approved its acquisition of Verizon's Wireline operations In California, Florida And Texas.

Joy Global Inc.(JOY) plummeted 16% after the company reported worse-than-expected quarterly profit and revenue as weak demand for commodities continues to batter the mining-equipment maker.

Geron Corp.(GERN) surged 12% after the biotech company late Wednesday said the New England Journal of Medicine was going to publish two papers showing positive results for its drug imetelstat.

Lannett Co. Inc.(LCI) jumped 13% after the pharmaceutical company said it'll buy UCB SA's (UCB.BT) Kremers Urban Pharmaceuticals Inc. for $1.23 billion (http://www.marketwatch.com/story/lannett-to-acquire-ucbs-kremers-urban-unit-2015-09-02-184854134).

Other markets: Asian markets closed mostly higher (http://www.marketwatch.com/storyno-meta-for-guid), inspiring gains across Europe's equity benchmarks (http://www.marketwatch.com/story/european-markets-rise-as-investors-wait-for-qe-hints-from-draghi-2015-09-03) as well. Markets in Shanghai and Hong Kong were closed for a two-day holiday to mark the 70th anniversary of the end of the World War II.

Gold (http://www.marketwatch.com/story/gold-retreats-as-focus-turns-to-jobs-report-us-economy-2015-09-03) also dipped, while the dollar gained against most other major currencies.

--Sara Sjolin in London contributed to this article.

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(END) Dow Jones Newswires

September 03, 2015 13:47 ET (17:47 GMT)

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