New York - US stocks rose on Thursday, as a turnaround in beaten-down momentum names boosted the Nasdaq while initial jobless claims data, which suggested the labor market was improving, helped lift the broader market.
Initial claims for state unemployment benefits declined 26,000 to a seasonally adjusted 319,000 for the week ended May 3, snapping three weeks of declines.
Economists polled by Reuters had forecast first-time applications for jobless benefits to fall to 325,000 last week.
After falling 1.7 percent over the past two sessions, the Nasdaq rebounded as heavy momentum names bounced off earlier lows.
Tesla Motors halved its losses in the session so far and was down 5.7 percent at $189.87.
The Global X Social Media Index ETF, which had fallen more than 14 percent since April 22 heading into Thursday's session, advanced 2.9 percent.
“It's driven a little bit by the volatility in the big Nasdaq names, notably the momentum stocks, which I guess at least some investors felt maybe made a temporary bottom this morning. When they turned positive, it gave some confidence to the overall market,” said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.
“These are momentum stocks where the questioning has been of the multiple and it's very subjective as to what people are willing to pay and what they think the future will be.”
US Federal Reserve Chair Janet Yellen's testimony, as prepared for delivery to the Senate Budget Committee on Thursday, was a repeat of the remarks she delivered before a joint House-Senate panel a day earlier.
On Wednesday, Yellen, in testimony to the Joint Economic Committee, said a slumping housing market and geopolitical tensions risked undermining the US economy and needed to be closely watched by the Federal Reserve.
Shares of Priceline Group Inc gained 0.7 percent to $1,140.09, rebounding from a session low of $1,087.26 after it reported higher-than-expected quarterly profit but forecast second-quarter results below market estimates.
Tesla Motors Inc offered an outlook for the second quarter on Wednesday that disappointed some investors.
The Dow Jones industrial average rose 85.78 points, or 0.52 percent, to 16,604.32, the S&P 500 gained 9.41 points, or 0.5 percent, to 1,887.62 and the Nasdaq Composite added 37.917 points, or 0.93 percent, to 4,105.59.
Of 445 companies in the S&P 500 that reported earnings through Wednesday morning, 68.2 percent beat expectations, above the 63 percent average since 1994, and exceeding the 66 percent beat rate for the past four quarters, according to Thomson Reuters data.
Profits are expected to rise 5.3 percent this quarter, down from 6.5 percent estimated at the start of the year, but above the low of 0.6 percent in mid-April, according to Thomson Reuters data.
Twitter Inc jumped 6.3 percent to $32.60 and Yelp Inc advanced 5.8 percent to $55.80 after Morgan Stanley raised its rating on both social media companies.
Many of these momentum-driven names have been under pressure recently.
Keurig Green Mountain Inc said on Wednesday it is expanding its partnership with J.M. Smucker Co, agreeing to make and sell Smucker coffee brands, including Folgers, in formats compatible with new Keurig brewing systems.
Shares of the K-cup coffee pod maker surged 16.3 percent to $107.24 as the best performer on both the S&P 500 and Nasdaq 100 indexes.
Smucker shares were up 0.9 percent at $99.48. - Reuters