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Dow winning streak at 10 days, longest in 16 years 

Stocks closed near session highs Thursday, with the Dow logging its first 10th-straight winning streak for the first time since 1996 and the S&P 500 within a hair's breadth of its all-time closing high, lifted by a better-than-expected jobless claims report.

"This could be the greatest bull run since the '80s only because there's nowhere else for investors to go," said Alan Valdes, director of floor operations at DME Securities. "The Fed's pumping $85 billion a month into the market so there's no way for it to go down, but everyone's got their finger on the trigger because they don't know when this is going to turn."

The Dow Jones Industrial Average gained above 14,500 for the first time, and logged its 10th consecutive rally. Cisco and Verizon led the gainers.

The blue-chip index is up 10 percent so far in 2013, on track to logging its best first-quarter performance since 1998. Historically, a strong first quarter indicates robust gains for the year. Since 1950, there have been only 12 other instances where the Dow was up more than 8 percent in the first quarter and in each of those years, the index finished positive 100 percent of the time.

The Dow Jones Industrial Average rallied 83.86 points, or 0.58 percent, to end at 14,539.14. Hewlett-Packard and IBMled the gainers, logging its first 10th-consecutive winning streak for the first time since November 1996. The S&P 500 rose 8.71 points, or 0.56 percent, to close at 1,563.23 -- just short of its all-time closing high set in 2007. The Nasdaq gained 13.81 points, or 0.43 percent, to finish at 3,258.93.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, ended near 11, falling to a six-year low.

Among key S&P sectors, telecoms and techs led the gainers.

On the economic front, weekly jobless claims unexpectedly declined 10,000 in the previous week to a seasonally adjusted 332,000, according to the Labor Department, marking the third-consecutive week of declines. Economists polled by Reuters expected first-time applications last week to climb to 350,000.

(Read More: Bear Market to Take Hold in 2013: Expert)

Also on the economic front, producer prices increased 0.7 percent in February, gaining by the most in five months as gasoline prices spiked, according to the Labor Department.

And current account deficit narrowed to $110.4 billion in the fourth quarter, according to the Commerce Department. Economists had expected the gap to widen to $112.8 billion from a previously reported $107.5 billion for the third quarter.

President Barack Obama is expected to return to Capitol Hill for the second in a three-day set of meetings to try and reach a compromise with Republicans on how to trim the fiscal deficit. However, in an interview with ABC that aired on Wednesday, Obama warned that agreement could prove impossible. (CNBC Explains: Sequestration)

"Ultimately, it may be that the differences are just too wide," Obama said.

(Read More: We Should Have Gone Over the 'Fiscal Cliff': Hoyer)

Men's Wearhouse surged after the men's clothing retailer hired Jefferies to evaluate strategic alternatives for its K&G division and authorized a new $200 million stock buyback program, which helped overshadow the firm's weaker-than-expected quarterly earnings.

Samsung is set to unveil its Galaxy S4 smartphone in New York City and analysts speculate that the new version will include an eye-scroll function and feature a bigger screen than the current Galaxy S3.

"Apple's status has been steadily undermined by the flawless execution Samsung has demonstrated in the more frequent iterations of its Galaxy smartphone offering," said David Garrity, principal at GVA Research. "Whether the Galaxy 4S will be the product generation that moves Samsung squarely ahead of Apple as innovation leader remains, but it clearly is a message that Samsung has been aggressively marketing."

Apple shares have continued to tumble in recent months, falling nearly 40 percent from its all-time high of $705 in September. And in the latest blow to the tech giant, research house IDC on Wednesday said shipments of tablets running the Android operating system is expected to top the iPad this year for the first time. Still, Apple edged higher Thursday after BTIG raised its rating on the iPhone maker to "buy" from "neutral."

(Read More: Apple's iPad to Fall Behind Android as Tablet War Grows)

Meanwhile, Google announced it will retire its Google Reader in July, citing declining usage. This follows Wednesday's news that Andy Rubin will step down as head of Google's Android division, and will be replaced by Sundar Pichai. declined after JPMorgan downgraded the online retail giant to "neutral" from "overweight." Meanwhile, Ebay climbed after Evercore Partners upgraded the online auction site operator to "overweight" from "equal weight."

Etrade tumbled to lead the S&P 500 laggards after the company's largest investor Citadel said it is selling its entire stake in the firm, ending a five-year relationship.

The Treasury will auction $13 billion 30-year notes on Thursday, with results available shortly after 1pm ET.

European shares traded at 4-1/2 year highs, as European Union heads of state headed to Brussels to discuss the region's austerity measures and rising youth unemployment.

"With the euro area economy having contracted in each of the past five quarters… and with countries' fiscal policy plans set to be reviewed, this summit provides an opportunity for policymakers to give permission to struggling countries to go a little easier on the austerity," wrote Emily Nicol, an economist at Daiwa Capital.

(Read More: Germany Unveils Spending Cuts on Eve of EU Summit)

—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter:@JeeYeonParkCNBC)