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Stocks Surge, Dow Up 180 points for Best Session This Year

Stocks surged more than 1 percent on Thursday, with the Dow posting its best session this year, as Wall Street embraced a drop in applications for jobless benefits as indicating an improving labor market and economy, a day ahead of the monthly jobs report.

The Dow Jones Industrial Average closed unofficially 188 points, or 1.2 percent, higher. It had not ended 1 percent higher any day since Dec. 18.

The Nasdaq was 45 points, or 1.1 percent, higher and the S&P 500 gained 21 points, a 1.2 percent jump.

Economic reports showed unemployment claims fell by 20,000 to 331,000 last week, with the Labor Department's weekly data coming in ahead of Friday's non-farm payrolls report for January.

Other economic data had the U.S. trade deficit expanding 12 percent to $38.7 billion. The Commerce Department report illustrated a broad-based drop after jumping in November, as imports edged higher on increasing consumer demand.

Another report had fourth-quarter productivity coming in a 3.2 percent, versus expectations it would fall to 2.5 percent from 3.0 percent, the Labor Department said.

Overseas, the European Central Bank kept its rates unchanged at a record low, as expected, with its president Mario Draghi saying risks to the euro zone were still on the downside, but that turmoil in emerging markets could hinder economic recovery.

The dollar declined against the currencies of major U.S. trading partners; the yield on the 10-year Treasury note used in determining mortgage rates and other consumer loans climbed 3 basis points to 2.703 percent.