The number of Americans filing new claims for unemployment benefits fell last week, pointing to a strengthening labor market.
Initial claims for state unemployment benefits slipped by 3,000 to a seasonally adjusted 294,000 for the week ended Dec. 6, the Labor Department said on Thursday. The prior week's data was unrevised.
Economists polled by Reuters had forecast claims falling to 295,000 last week.
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, ticked up by 250 to 299,250, holding below the 300,000 mark for the 13th straight month.
A Labor Department analyst said there were no special factors influencing last week's claims data. There is little doubt that the labor market is gathering steam.
Job gains in November were the largest in nearly three years and marked the 10th straight month of increases above 200,000, the longest such stretch since 1994.
The claims report showed the number of people still receiving benefits after an initial week of aid increased by 142,000 to 2.51 million in the week ended Nov. 29.
bouncing sharply from a three-day drop, as data pointed to a strengthening economy that could weather the impact of a steep drop in oil prices.
The benchmark S&P index dropped more than 1 percent on Wednesday and had shed 2.4 percent over the prior three sessions, its worst run in two months, as weakness in oil prices has weighed heavily on the energy sector.
But data indicated that lower oil prices encouraged consumer holiday spending, with retail sales data for November beating expectations. The S&P retail index jumped 2.1 percent, lifted by a 2 percent climb in Home Depot to $100.96.
"We are starting to get some metrics around the energy and we are seeing that one 'X' factor of will consumers spend this extra money?" said Sean McCarthy, regional CIO for Wells Fargo Private Bank in Scottsdale, Arizona.
"And in the holiday season they are (spending), and more so."
Falling oil prices have added to worries about global demand and raised concerns about earnings for energy companies, with year-end tax selling putting additional pressure on the group. The sector is down 12.8 percent for the year and is the worst performing of the 10 major S&P sectors.
Brent crude, down more than 40 percent from its June high, briefly swung between gains and losses in volatile trading, and last traded flat at $64.24. WTI crude rose 0.2 percent to $61.07.
Other economic data showed a strengthening labor market, as weekly initial jobless claims dipped by 3,000 to an adjusted 294,000 while the drop in oil prices helped spur the biggest decline in U.S. import prices in 2-1/2 years.
The data may influence investors' expectations on whether the Fed will adjust its language to keep interest rates near zero for a "considerable time" when policymakers meet next week.
The Dow Jones industrial average rose 196 points, or 1.12 percent, to 17,729.15, the S&P 500 gained 25.15 points, or 1.24 percent, to 2,051.29 and the Nasdaq Composite added 65.09 points, or 1.39 percent, to 4,749.12.
Other data showed U.S. business inventories excluding automobiles rose 0.3 in October, which could affect fourth-quarter growth estimates.
Lululemon Athletica jumped 9.4 percent to $51.10 after the maker of yoga apparel posted quarterly results.
Staples Inc jumped 8.8 percent to $16.12 as the best performer on the Nasdaq 100 and Office Depot climbed 10.3 percent to $7.42 after Activist investor Starboard Value LP disclosed stakes in both office-supply retailers in a move that could set up a potential merger.
Advancing issues outnumbered declining ones on the NYSE by 2,428 to 542, for a 4.48-to-1 ratio; on the Nasdaq, 2,010 issues rose and 566 fell for a 3.55-to-1 ratio.
The benchmark S&P 500 index was posting 29 new 52-week highs and 8 new lows; the Nasdaq Composite was recording 65 new highs and 34 new lows.