Wall Street closes sharply higher after US jobless claims data

U.S. stocks rose on Thursday, with all three major indexes closing higher, after jobless claims fell more than expected last week, easing concerns that the labor market was weakening too quickly.

All sectors of the S&P 500 advanced, led by gains in the technology and communication services sector.

Data showed the number of new applications for unemployment benefits last week fell more than expected.

“This was the data of the week, so it took on added importance,” said Paul Nolte, a wealth adviser and market strategist at Murphy & Sylvest in Elmhurst, Illinois. “Our read on this is that the labor market is still doing well. … Recession fears right now are probably a little overblown.”

Stocks had suffered a sharp sell-off after the US July jobs report sparked fears of a possible recession.

Last week, traders also cited a liquidation of carry trade positions, where investors borrow money from economies with low interest rates to fund their bets on high-yielding assets elsewhere.

According to preliminary data, the S&P 500 rose 121.32 points, or 2.30 percent, to 5,320.82, the Nasdaq gained 464.22 points, or 2.87 percent, to 16,660.02 and the Dow Jones Industrial Average added 689.45 points, or 1.78 percent, to 39,452.90.

The Cboe Volatility Index, a gauge of fear on Wall Street, fell during the session.

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