U.S. stocks traded higher Thursday, with the Dow Jones Industrial Average headed for its fifth straight gain, a day after the blue-chip gauge closed at an all-time high.

Markets held onto overnight gains after a weekly report on Americans seeking unemployment benefits came in lower than expected and fell to the lowest level since early November, amid COVID-19 vaccine distribution and another Congressional fiscal aid package, a year after the World Health Organization declared COVID-19 a pandemic.

Investors were also parsing a monetary policy update from the European Central Bank a week ahead of the Federal Reserve’s meeting.

What are major indexes doing?
  • The Dow Jones Industrial Average

    rose 108 points, or 0.3%, to 32,400, setting an intraday high at 32,431.82.

  • The S&P 500

    climbed 31 points, or 0.8%, at 3,929, knocking on the door of trading in record territory at 3,934.83 set on Feb. 12 .

  • The Nasdaq Composite Index

    jumped 240 points, or 1.8%, to around 13,306.

On Wednesday, the Dow soared 464.28 points, or 1.5%, to close at a record 32,297.02, finishing above the 32,000 milestone for the first time. The S&P 500 rose 0.6%, while the Nasdaq Composite ended marginally lower, falling less than 0.1%.

See: Dow ends above 32,000 milestone for first time. Here’s how it got there

What’s driving the market?

Weekly unemployment benefit claims dipped by 42,000 to 712,000 in the week ended March 6, the Labor Department said Thursday, the lowest level since the week ended Nov. 7. Economists surveyed by Dow Jones and The Wall Street Journal had forecast new claims would fall to a seasonally adjusted 725,000 from last week’s initial estimate of 745,000 which was revised up by 9,000 to 754,000.

“The drop in jobless claims is another win for the week, and a solid sign that we’re making some strides toward pre-pandemic life,” wrote
Mike Loewengart, managing director investment strategy at E-Trade Financial.

The news comes as equity futures signaled the technology-heavy Nasdaq Composite could be set to outperform after a rotation in recent weeks away from growth stocks left the gauge lagging behind other major benchmarks.

On Wednesday, U.S. inflation data were in line with expectations, soothing fears for now of a near-term surge in consumer prices. Analysts said that could give growth shares, which are more sensitive to rising bond yields, room to bounce back.

“Combined with stimulus relief in sight and a muted [consumer price index] read yesterday plus increased vaccinations and decreased business restrictions, there’s a pretty optimistic picture being painted despite some of the inflation-related market jitters we’ve seen over the past few weeks,”  Loewengart wrote.

“But as we hit the one-year mark of the pandemic, it’s hard to ignore just how far we have to go on the labor market front to get back to full employment,” he added.

Treasury yields, which have been a major catalyst for market moves in recent weeks, edged lower on Thursday as European Central Bank President Christine Lagarde said that higher market rates pose risk to financing conditions. Her statement came immediately after the ECB said that it would accelerate bond purchases under its pandemic emergency purchase program, or PEPP, while leaving the “envelope” for total purchases unchanged at €1.85 trillion.

The ECB, as expected, left its policy interest rates unchanged and said that net purchases under its asset purchase program will continue at a monthly pace of €20 billion.

Expectations for a surge in economic growth and inflation have been stoked by passage by Congress of a $1.9 trillion package of COVID relief set to be signed into law by President Joe Biden this week.

Read: Dow ends at a record high while Nasdaq remains in correction — That hasn’t happened in 20 years

But some analysts have argued that while rising yields have coincided with the rotation away from growth stocks, they are not necessarily a cause, or a prerequisite, for the phenomenon.

Check out: Why the stock market’s big rotation can continue even without rising bond yields

“We continue to favor value stocks over growth and see prolonged high volatility in ‘Big Tech’ names with risks tilted to the downside in the short term,” said Hussein Sayed, chief market strategist at FXTM, in a note.

“Not only will higher interest rates lead to the outperformance of value companies, but it is also the optimism surrounding the economy reopening. That is not to say that all growth names will be out of favor, but investors need to be very selective and take valuations into serious consideration.”

See: Eurozone banks are showing life after 15 rough years. Will the ECB snuff out the rally?

In other economic reports, data on January job openings is due at 10 a.m. ET.

Which companies are in focus?
How are other assets faring?
  • The yield on the 10-year Treasury note TMUBMUSD10Y edged down to 1.51%. Yields and bond prices move in opposite directions.

  • The ICE U.S. Dollar Index DXY, a measure of the currency against a basket of six major rivals, was down 0.3%.

  • Oil futures traded sharply higher, with the U.S. benchmark CL.1 picking up 87 cents, or nearly 1.4%, to trade at $65,32 per barrel. Gold futures GC00 edged $1.80, or 0.1%, higher to $1,722.70 an ounce.

  • The pan-European Stoxx 600 Europe index SXXP rose 0.4% and London’s FTSE 100 UKX was gaining less than 0.1%.

  • In Asia, Hong Kong’s Hang Seng Index HSI advanced 1.7%, the Shanghai Composite Index

    rose 2.4%, China’s CSI 300 rallied by 2.5%, while Japan’s Nikkei 225 index

    rose 0.6%.

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