By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks finished Thursday with the
best gains in seven weeks as investors welcomed a
larger-than-expected drop in weekly jobless claims and upbeat
earnings from companies including Walt Disney Co.
Thursday's jobless claims data set an optimistic tone for
Friday's non-farm payrolls report due at 8:30 a.m. Eastern.
The S&P 500 index (SPX) closed up 21.79 points, or 1.2%, at
1,773.43. The Dow Jones Industrial Average (DJI) closed near
session highs, adding 188.30 points, or 1.2%, to 15,628.53. Both
indexes saw their biggest gains since Dec.18, when the Federal
Reserve announced it would start reducing its economy-stoking bond
purchases.
The Nasdaq Composite (RIXF) ended the day 45.57 points, or 1.1%,
higher at 4,057.12.
Read the recap of our stock market live blog.
"Market pullbacks are normal and we think concerns about
emerging markets reminded investors that markets do not always go
in a straight line," said Kate Warne, investment strategist at
Edward Jones.
"Apart from a few data points that were disappointing, recent
reports have been positive. Earnings have been positive. And the
Fed is still rescuing, even as it tries to reduce the support.
Considering such a background, it would take some really bad news
for stocks to fall dramatically," Warne added.
Helping the sentiment was the data on initial weekly jobless
claims. The number of people who applied for unemployment benefits
for the first time fell by 20,000 to 331,000 last week, better than
forecasts for 337,000. In other economic news, the U.S. trade
deficit widened more than expected and productivity increased
slightly less than anticipated.
The data come a day after a disappointing report on
private-sector jobs growth from ADP and a day ahead of key
nonfarm-payroll figures.
Ahead of the bell, the European Central Bank left key rates
unchanged, and the central bank's president, Mario Draghi, said at
the news conference that medium- and long-term inflation
expectations remain well-anchored, with no real deflation risk.
Read the recap of our live blog of Draghi's news conference
The Bank of England left policy unchanged and its quantitative
easing program steady.
Earnings results released after the market close on Wednesday
and before the opening bell Thursday were mixed.
Disney (DIS) shares jumped 5.3%, leading gains on the Dow
average, after earnings topped estimates, helped by the popularity
of the "Frozen" animated movie.
Twitter Inc. (TWTR) plunged 24% after earnings disappointed
investors late Wednesday.
Shares of Green Mountain Coffee Roasters (GMCR) surged 26% after
the company said it would sign a 10-year drink deal with Coca-Cola
(KO). Coca-Cola is taking a 10% stake in the company for $1.25
billion.
Costco Wholesale Corp. (COST) shares rose 3.4% after the
retailer reported a rise in same-store sales.
Akamai Technologies Inc. (AKAM) shares soared 21%, the best on
the S&P 500, after fourth-quarter earnings increased 18% and
revenue jumped in results released late Wednesday.
In other markets, Asian stocks closed mostly higher, except for
the Nikkei 225, while the European stock markets rallied as the
European Central Bank left a key rate unchanged. The U.S. dollar
slipped, gold and natural gas climbed ahead of supply data.
More stories from MarketWatch:
Jobless claims drop 20,000 to 331,000
Twitter user growth sparks investor jitters
Sochi's messy start, Twitter's pain and Salesforce.com's bull
setup
Subscribe to WSJ: http://online.wsj.com?mod=djnwires