European Central Bank President Mario Draghi said Friday the bank is ready to expand its economic stimulus program if need be, just a day after the bank's surprisingly modest steps to shore up the region's economy sent shudders through global financial markets.

"We are ready at any time to recalibrate our array of tools," Draghi said.

The comments came during a speech at the Economic Club of New York Friday. On Thursday in Frankfurt the ECB announced a slight cut in one of its key interest rates, but it declined to step up its monthly purchases of bonds, as investors had expected, to reduce borrowing costs for consumers and businesses. Investor disappointment about the decision sent European stock markets to one of their worst days in months.

Draghi seemed to seek to ease investor concerns Friday, repeating both in his speech an in response to questions from a panel that the ECB can expand its bond-buying program, known as quantitative easing, or cut interest rates even further, if necessary.

"QE is here is to stay," Draghi said, using an abbreviation for quantitative easing.

European markets were closed for the day when Draghi appeared. U.S. stocks were already sharply higher Friday, and they extended their gains after Draghi began speaking at midday Eastern time. The Dow Jones industrial average was up 2 percent as of 1 p.m. Eastern; it was up 1.4 percent before Draghi's remarks.

Europe's economy has lagged behind the U.S. since the financial crisis, and policymakers have struggled to keep the 19 countries that use the euro from economic contraction.

Draghi cautioned, though, that the ECB's ability to stimulate growth — even if it does take further action — is limited.

"Our monetary policy cannot achieve everything," he said.

Ken Sweet can be reached at http://twitter.com/KenSweet .