Updated at 12:03 p.m. ET

Stocks rallied Thursday as investors felt bullish after the European Central Bank announced it was leaving rates unchanged and as its president, Mario Draghi, agreed to a new bond-buying program. On the domestic front, a handful of better-than-expected​ employment reports looked encouraging ahead of Friday's monthly jobs data.

The Dow Jones Industrial Average ($INDU) was up 237 points at 13,285. The S&P 500 ($INX) was up 27 points at 1,430, topping its highest closing level since 2008, Bloomberg reported. The Nasdaq Composite ($COMPX) was up 62 points at 3,131.

European stocks were higher and the euro approached a two-month high against the dollar as the ECB left its benchmark rate at a record low of 0.75%. The Bank of England also left its benchmark rate unchanged at 0.5%.

ECB announces bond-buying plan
The ECB outlined a bond-buying program to lower struggling eurozone countries' borrowing costs, Draghi said. The program, aimed at the secondary market, would also help safeguard the euro.

The program, which the Bundesbank is known to have opposed, would focus on bonds maturing within three years. "We are strictly within our mandate," Draghi said, according to Reuters. Draghi said only one member of the ECB Governing Council had dissented.

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Eurozone growth data
Second-quarter growth in the in the 17 countries using the euro decreased by 0.2% compared with the previous quarter, according to second estimates released by Eurostat. GDP for the eurozone was 0.5% lower than the same quarter last year.

Strong exports limited the eurozone's economic contraction in the second quarter despite falling investment, inventories and private consumption that point to output shrinking overall in 2012.

US jobs numbers

Fewer Americans than forecast filed for unemployment benefits last week as jobless claims fell to their lowest level in a month, easing concerns that the labor market may weaken in the second half, Bloomberg reported.

Jobless claims decreased by 12,000 to 365,000 in the week ended Sept. 1, the Labor Department reported. Economists had expected jobless claims to drop to 373,000, according to Briefing.com. The four-week average inched up by 250 to 371,250. Claims in the previous week were revised to an increase of 3,000 to 377,000 compared with the initial estimate that they held steady at 374,000.

Payrolls processor Automatic Data Processing showed employers added 201,000 private-sector jobs in August, much more than the expected 143,000, according to Briefing.com. Moreover, the July figure was revised up to 173,000 from the previously reported 163,000.

The ADP report follows one from outplacement firm Challenger, Gray & Christmas that showed more than 32,000 planned job cuts in August, fewer layoffs than were announced in July.

Employment data and the Fed

The three reports offer a glimpse into what Friday's government employment report could reveal. Economists expect employers added 123,000 jobs in August, according to Briefing.com. Investors will pay especially close attention to Friday's jobs report, as it will likely influence the Fed's decision on more quantitative easing.

While recent reports show employers are limiting firings because of improved demand, weak hiring and an unemployment rate above 8% pose a "grave concern," Fed Chairman Ben Bernanke said last week as he made a case for further monetary easing.

Meanwhile, U.S. service industries expanded in August at a faster pace than forecast. The Institute for Supply Management's non-manufacturing index climbed to a three-month high of 53.7 from 52.6 in July. Economists had expected it to ease to 52.4, according to Briefing.com.

Stocks to watch

American International Group (AIG) has unveiled a plan to sell up to $2 billion shares of AIA Group Ltd. in Hong Kong to raise proceeds for general corporate purposes and said it has been authorized to buy back up to $5 billion in stock, MarketWatch reported.

Navistar International (NAV) shares soared after the company reported fiscal-third-quarter​ results that were lower than last year's but still beat expectations. The truck maker also unveiled a restructuring plan. 

VeriFone Systems (PAY) shares fell after the company reported a rise of 43% in fiscal-third-quarter​ net income on higher revenue, led by its services business. However, the electronics payment company also predicted weak fourth-quarter revenue.

Supervalu (SVU) will close about 60 "underperforming or non-strategic" stores in an effort to trim its expenses. The supermarket operator will record $80 million to $90 million in closure-related charges for fiscal 2013.

Amazon.com (AMZN) shares rose ahead of a media event in which the online retailing giant could unveil a new Kindle Fire tablet, according to analyst speculation.

Apple (AAPL), which is widely expected to show off its new iPhone 5 at an event next week, also rose.