Dow Average rises to another record as jobless claims decline

Stock prices rose again Thursday as investors reacted to positive employment news and rising sales at retailers.

The Dow Jones Industrial Average closed at its third consecutive record closing high, up 33.25 points to 14329.49. The Nasdaq Composite Index rose 9.72 points to 3,232.09 and the S&P 500 Stock Index edged up 2.80 points to 1,544.26.

The Department of Labor reported initial claims for jobless benefits fell 7,000 in the past week to 340,000. The department will report on February employment data before the start of trading on Friday.

Oil rebounded Thursday, up $1.13 to $91.56 a barrel. However, gold was little changed, up 20 cents to $1,575.10 an ounce.

“There’s an underlying element of support for the labor market and it’s really driven by housing and potentially construction finally coming back,” Robert Lutts, chief investment officer of Cabot Money Management in Boston, which manages $500 million, said in a telephone interview. “We’re starting to see some health in some of those dormant areas of the economy, so quantitative easing and lower interest rates are finally having an impact and the stock market is of course telling us that.”

The trade deficit in the United States widened more than forecast in January as demand for imported crude oil rebounded. The gap grew to $44.4 billion from $38.1 billion in December, Commerce Department figures showed.

European Central Bank President Mario Draghi stuck to his view that the euro-area economy will gradually recover later this year. The ECB Thursday predicted the 17-nation economy will shrink 0.4 percent this year, more than the 0.3 percent contraction forecast three months ago. The central bank lowered its 2014 inflation projection to 1.3 percent from 1.4 percent.

“We’ve called this whole market the bunker bull market, meaning people are still in the bunker and not really believing it quite yet,” Brian Belski, the N.Y.-based chief investment strategist at BMO Capital Markets, said in a radio interview with Tom Keene and Michael McKee on “Bloomberg Surveillance.” “When people find out and realize they’re losing money for several months in a row, and they’ll see the positive returns in stocks, they’ll come back.”

Financial companies rallied the most out of 10 S&P 500 groups, jumping 0.7 percent. Twenty-three out of 24 members in the KBW Bank Index rose, as the gauge climbed 1.2 percent to its highest level since May 2010. Bank of America Corp. (NYSE: BAC) added 2.9 percent to $12.26. Lenders will get preliminary word Thursday from the Federal Reserve’s stress tests about whether their capital plans are approved.

Ciena Corp. (Nasdaq: CIEN) surged 17 percent to $17.53. The company reported first-quarter profit of 12 cents a share, compared with a 14-cent loss estimated by analysts on average. Revenue in the period also beat projections. Rival JDS Uniphase (Nasdaq: JDSU) added 7.6 percent to $15.23.

Smithfield Foods Inc. (NYSE: SFD) rallied 11 percent to $24.68. The pork producer posted third-quarter adjusted earnings of 58 cents a share, topping the average analyst estimate of 50 cents.

Time Warner Inc. (NYSE: TWX) climbed 2.4 percent to $56.78 after saying its board authorized managers to later this year spin off the magazine unit, which publishes Time, People and Sports Illustrated, into a separate publicly held company. The sale will help Time Warner to focus on its film- and TV-production businesses, Chief Executive Officer Jeff Bewkes said.

Boeing Co. (NYSE: BA) jumped 2.5 percent to $81.05, its highest level since June 2008. Emirates, the largest operator of Boeing’s 777 aircraft, said the U.S. manufacturer is getting closer to offering a new version that will seek to defend its lead against Airbus SAS in the wide-body market.

Gap Inc. (NYSE: GPS) climbed 4.1 percent to $35.87, the highest level in four months. The retailer reported comparable-store sales in February rose 3 percent, exceeding the 2.3 percent increase estimated by analysts on average.

Apache Corp. (NYSE: APA) advanced 2.9 percent to $75.65 as the fourth- largest U.S. independent oil and gas producer by market value may begin a process to sell deep-water assets in the Gulf of Mexico as early as next week, a person familiar with the matter said.