By Chuck Mikolajczak
NEW YORK (Reuters) - U.S. stocks surged for a second day on Thursday, after equities snapped a five-session streak of losses in the prior session, on expectations for continued acceleration in the U.S. economy and more aggressive action by the European Central Bank.
The advance was broad, with 9 of the 10 major S&P sectors gaining at least 1 percent.
Initial claims for state unemployment benefits were slightly above expectations but slipped by 4,000 from the prior week, pointing to a firming labor market, ahead of the monthly payrolls report on Friday.
"What has occurred the past couple of days is that the market has focused back on what are still good fundamentals for equities. 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.
"The other factor that is getting investors excited is the fact the ECB may come in a couple of weeks and do a more robust action around their quantitative easing program."
Weak data in Europe recently has boosted expectations the ECB will move towards more stimulus.
The Dow Jones industrial average rose 266.51 points, or 1.52 percent, to 17,851.03, the S&P 500 gained 29.81 points, or 1.47 percent, to 2,055.71 and the Nasdaq Composite added 74.15 points, or 1.59 percent, to 4,724.61.
The benchmark index has gained 2.7 percent over the past two days, with the advance pushing the S&P back above its 50-day average, a technical support level it fell below on Jan. 5.
The S&P index added 1.2 percent Wednesday, its biggest advance since Dec. 18, to snap its longest losing streak in about 13 months. That rally came after strong private sector jobs data and minutes from the most recent Federal Reserve meeting reassured investors the bank was in no hurry to start raising interest rates.
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 in the commodity, as Brent crude was last off 0.5 percent at $50.90, while U.S. crude was flat at $48.64.
Retailers also gained after reporting sales results from the holiday season. Urban Outfitters rose 1.9 percent to $36.04 while the S&P retail index gained 0.8 percent.
Bind Therapeutics shares surged 63.5 percent to $8.42 after the company said it enrolled its first patient in a mid-stage trial for its lung cancer drug.
Neurocrine Biosciences jumped 17.7 percent to $25.76 after an experimental drug being developed by the company with AbbVie successfully reduced symptoms of endometriosis in pre-menopausal women in the first of two late-stage studies.
Advancing issues outnumbered declining ones on the NYSE by 2,333 to 650, for a 3.59-to-1 ratio; on the Nasdaq, 2,008 issues rose and 643 fell for a 3.12-to-1 ratio.
The benchmark S&P 500 index was posting 55 new 52-week highs and 8 new lows; the Nasdaq Composite was recording 75 new highs and 21 new lows.
(Editing by Bernadette Baum and Nick Zieminski)
