U.S. stocks climbed on Thursday as investors awaited Friday's highly anticipated jobs report to gauge the pace of the labor-market recovery.
The Dow Jones Industrial Average added 318.19 points, or 0.9%, to close near its session high, reaching a record close of 34,548.53. The S&P 500 rose 0.8% to 4,201.62. The Nasdaq Composite erased earlier losses and gained 0.4% to 13,632.84.
The gains came after a better-than-expected reading on jobless claims. First-time claims for unemployment insurance totaled 498,000 for the week ended May 1, hitting a fresh pandemic-era low and better than a Dow Jones estimate of 527,000.
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The data came one day before April's jobs report is released on Friday. Economists polled by Dow Jones expect one million payrolls to have been added last month and the unemployment rate is expected to fall to 5.8% from 6%.
"Today's read is another proof point that we're one step closer to full economic recovery, sooner than some may have expected," said Mike Loewengart, managing director of investment strategy at E-Trade Financial. "As we see some serious momentum building on the jobs front, all eyes will be on how this plays into action taken by the Fed, if any."
PayPal shares jumped 1.9% after the company posted better-than-expected earnings and said revenue last quarter surged 31%.
Etsy tanked by more than 14% after warning that sales will slow as the pandemic boost wanes.
The Nasdaq Composite posted its fourth straight negative session on Wednesday for its longest daily losing streak since October. The tech-heavy index is lower for the week. The Dow is on track to break a two-week losing streak.
"Technology sector earnings momentum relative to the broader market peaked in late May of 2020," said Keith Lerner, chief market strategist at Truist. "Given that we expect the economy to grow well above trend this year and next, value stands to benefit. Indeed, when looking at the value indices, they are dominated by financials and tend to have greater exposure to economically-sensitive sectors that are more leveraged to an economic recovery."
The Russell 1000 Value index has gained 17% this year, while the Russell 1000 Growth index has advanced 5%.
However, he added that concerns still remain in the market. For one, federal stimulus packages have boosted growth, and at some point, the economy will have to return to organic growth.
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