Wall Street rejoiced in an unexpected drop in weekly jobless claims Thursday that spurred hopes that the labor market recovery will stay on track.
Major stock indexes rose by nearly 2 percent after the Labor Department reported that the number of people filing for unemployment benefits dropped to the lowest level in nearly three years. Economists surveyed by Bloomberg had expected that the number of claims would rise by about 7,000, to 395,000. Instead, they fell by 20,000, to 368,000.
Investors were betting that the decline signaled good news for the monthly unemployment figure to be released Friday. Meanwhile, strong retail sales data and a dip in oil prices contributed to Wall Street’s optimism.
“We are beginning to crawl our way out of the hole left by the recession, albeit at a slower pace than we would like to see,” said Diane Swonk, chief economist for Mesirow Financial.
The tech-heavy Nasdaq closed up 51 points, at 2798.74, on Thursday, and the broader Standard & Poor’s 500-stock index climbed 23 points, to 1330.97. The Dow Jones industrial average, composed of 30 blue-chip stocks, rose 191 points, to 12,258.20.