Stocks rally as ECB vows to rescue eurozone

Updated at 12:30 p.m. ET

By Andrea Tse and wire reports

Stocks rallied Thursday as European Central Bank President Mario Draghi pledged to do everything possible to guarantee the survival of the eurozone. A decline in U.S. initial jobless claims and a rise in durable goods orders also lifted shares.

The Dow Jones Industrial Average ($INDU) was up 174 points at 12,850. The S&P 500 ($INX) was up 17 points at 1,355. The Nasdaq Composite ($COMPX) was up 28 points at 2,883.

"Draghi's words carry a great deal of weight because he has in the past refused to fill in where governments fail, recognizing the futility of sticking a finger in the dyke," said Andrew Wilkinson, a chief economic strategist at Miller Tabak. 

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In U.S. economic news, the Labor Department reported Thursday that initial jobless claims fell by 35,000 to 353,000 in the week ended July 21. Economists had forecast claims would fall to 380,000. The four-week moving average declined to 367,250 from 376,000, the lowest level since March. The number of Americans still collecting jobless benefits fell by 30,000 in the week ended July 14 to 3.29 million.

The Commerce Department said durable goods orders rose 1.6% in June after rising 1.6% in May. Economists had predicted orders would increase by 0.4%. Excluding transportation, orders fell 1.1%, the steepest decline in five months.

The National Association of Realtors reported that home sales agreements fell by 1.4% in June to a reading of 99.3, according to The Associated Press. May's reading was revised down to 100.7. A reading of 100 is considered healthy. The index is 9.5% higher than it was a year ago.

A handful of blue-chip quarterly earnings reports were released Thursday.

Exxon Mobil (XOM) reported second-quarter earnings of $1.86 a share on revenue of $127.36 billion, compared with the average estimate of $1.95 a share on revenue of $115.08 billion.

United Technologies (UTX) posted an increase in quarterly earnings of less than 1% as slowing Chinese economic growth and the European crisis hurt sales of its products.

3M (MMM) beat quarterly earnings estimates in part driven by strength in its health care, industrial and transportation businesses. 3M reported earnings of $1.66 a share versus the average estimate of 1 cent a share. Sales of $7.53 billion came in about $250 million below the Wall Street target. 3M's full-year outlook remains the same.

Facebook (FB) is expected to post its quarterly results after the close. It's the company's first report as a public company. Analysts expect a profit of 12 cents a share on revenue of $1.15 billion.

Facebook partner Zynga (ZNGA) on Wednesday reported a  below-consensus quarterly profit and lowered its outlook. The FarmVille maker cited a "a more challenging environment on the Facebook web platform." It said it now sees earnings of 4 cents to 9 cents a share. Wall Street analysts were looking for earnings of 27 cents a share.

Royal Dutch Shell (RDS.A) posted a decline in second-quarter profit, mostly because of lower oil prices. Shell's "current cost of supplies" earnings, which strips out the impact of swings in the price of oil between its production and sale, was $6 billion, compared with $8 billion a year earlier.