The Dow Jones Industrial Average jumped 172.54 points, or 2.08%, to 8472.40, the Standard & Poor's 500 added 19.32 points, or 2.14%, to 920.26 and the Nasdaq Composite picked up 37.20 points, or 2.08%, to 1829.54.
Thursday’s triple-digit rally, the Dow’s strongest since June 1, was sparked by a string of successful bond auctions and recovering crude oil prices. The gains came in the face of new data that showed jobless claims unexpectedly climbed to five-week highs.
“This market is getting sort of increasingly desensitized to the employment metrics. They are viewing them as what they are -- a lagging indicator,” said Craig Peckham, equity trading strategist at Jefferies & Co.
Despite the solid performance, the markets remain on track for a rare two-week losing streak. Still, the gains put at least a temporary stop to a recent wave of selling that had slammed Wall Street, erasing almost 300 points from the Dow's three-month surge. The bears had successfully argued in recent days that stocks had gotten ahead of the still-weak U.S. economy, a point highlighted by the new labor data.
Oil rises above $70 on Nigeria attack
Oil prices rose above $70 a barrel Thursday after Nigerian rebels attacked a Royal Dutch Shell pipeline, raising worries about supply from the OPEC-member nation.
Crude also got a lift as Wall Street rallied on hopes for an economic recovery and as gasoline futures rebounded heading into the peak of the U.S. summer driving season.
U.S. crude for August delivery rose $1.56, or 2.3%, to settle at $70.23 a barrel Thursday.
In the latest in a string of attacks in Nigeria, Africa's biggest oil producer, the Movement for the Emancipation of the Niger Delta (MEND), said it had sabotaged the Billie-Krakama pipeline in Rivers State, which supplies one of the country's main export terminals.
Attacks by MEND have forced foreign oil companies, including U.S. oil major Chevron and Italy's Agip, to shut at least 133,000 barrels per day of oil production in the last month.
Shell said it had shut down one of its pipeline junction points Thursday but declined to say whether any oil production had been affected.
"Nigeria's MEND rebels have escalated their activities recently and are certainly a supportive influence (to oil prices)," Mike Fitzpatrick, vice president at MF Global in New York, said in a research note.
The gains came alongside a roughly 2% rally on Wall Street fueled by optimism that the recession is easing -- a prospect that could spell higher global energy demand.
Oil prices also got a boost from a rebound in gasoline futures ahead of the July 4 holiday -- typically one of the busiest driving holidays of the year.