By Caroline Valetkevitch
NEW YORK (Reuters) - U.S. stocks jumped more than 1 percent for a second day in afternoon trading on Thursday, lifted by expectations the U.S. economy will continue to accelerate and the European Central Bank will take more aggressive action.
The advance was broad, with the materials, energy and technology sectors each up more than 2 percent.
Initial claims for state unemployment benefits were slightly above expectations but slipped from the prior week, pointing to a firming labor market, ahead of the monthly payrolls report on Friday.
Stocks on Wednesday snapped a five-day losing streak after strong private sector jobs data and as minutes from the most recent Federal Reserve meeting reassured investors the bank was in no hurry to start raising interest rates.
"There is a Fed that is going to be patient and pretty transparent on when they are going to raise rates and an economy that is doing pretty well," said Sean Lynch, co-head of global equity strategy at Wells Fargo Investment Institute in Omaha.
At the same time, weak data in Europe has boosted expectations the ECB will move towards more stimulus.
At 1:16 p.m., the Dow Jones industrial average rose 306.36 points, or 1.74 percent, to 17,890.88, the S&P 500 gained 35.1 points, or 1.73 percent, to 2,061 and the Nasdaq Composite added 86.78 points, or 1.87 percent, to 4,737.25.
The benchmark index has gained more than 2 percent over the past two days, pushing the S&P back above its 50-day average, a technical support level it fell below on Jan. 5.
Signs of possible stabilization in oil prices again helped boost sentiment, although market analysts were still not ready to say prices had found a floor. Brent crude was last off 0.8 percent at $50.75, while U.S. crude was flat at $48.56.
Retailers gained after reporting sales results from the holiday season. Urban Outfitters rose 3.4 percent, while the S&P retail index gained 1.1 percent.
Biotechs were among the most active shares, recording some of their biggest one-day moves on the back of strong drug study results.
Bind Therapeutics shares surged 59.3 percent after the company said it enrolled its first patient in a mid-stage trial for its lung cancer drug.
Advancing issues outnumbered declining ones on the NYSE by 2,382 to 645, for a 3.69-to-1 ratio; on the Nasdaq, 1,987 issues rose and 702 fell, for a 2.83-to-1 ratio.
(Additional reporting by Charles Mikolajczak; Editing by Bernadette Baum and Nick Zieminski)
