By Wallace Witkowski and Anora Mahmudova, MarketWatch

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

A Wall Street rally ran out of steam, limping to the close of Thursday's session as oil futures relinquish early gains ahead of highly anticipated Friday employment report.

The jobs report is widely viewed as the last piece of U.S. data puzzle before the Federal Reserve makes its interest-rate policy decision at its two-day meeting beginning Sept. 16.

On Thursday, early investor optimism, sparked by healthy data and comments viewed as dovish from European Central Bank President Mario Draghi faded as stocks took its cues from a retreat in oil futures late in the trading session.

The S&P 500 , which rallied more than 1% in early session, closed 2.27 points, or 0.1% higher to 1,951.13, with eight of its 10 main sectors finishing in positive territory.

The Dow Jones Industrial Average relinquished its 200-point pop to finish 23.38 points, or 0.1%, higher at 16,374.76, while the Nasdaq Composite ended the day down 16.48 points, or 0.4% at 4,733.50.

Crude oil 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 but the commodities' retreat below $47 a barrel, weighed on energy stocks.

An earlier move higher in stocks had come as Draghi at a news conference (http://blogs.marketwatch.com/thetell/2015/09/03/ecb-live-blog-will-china-worries-falling-oil-spark-more-easing/) reasserted that 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 didn't 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 actions comes amid relative quiet in Asian markets with the volatile Chinese 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.

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 for Friday's nonfarm payrolls report.

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.

In other data, 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).

Movers and shakers: L Brands Inc. (LB) shares climbed 4.1% 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 6% after Federal Communications Commission approved its acquisition of Verizon's Wireline operations In California, Florida And Texas.

Joy Global Inc.(JOY) plummeted 15% after the company reported worse-than-expected quarterly profit and revenue as weak demand for commodities continues to batter the mining-equipment maker.

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 17:48 ET (21:48 GMT)