The Dow Jones Industrial Average has lost more than 487 points this week in the face of the disaster in Japan, the world's third-largest economy.

But on Thursday the blue-chip Dow jumped 144.33 points (1.24 percent) to 11,757.63 by 1530 GMT.

The tech-rich Nasdaq Composite added 40.51 points (1.55 percent) to 2,657.33, while the broad-market S&P 500 index advanced 18.52 points (1.47 percent) to 1,275.40.

"We believe the market is set up for a knee-jerk bounce," said Scott Marcouiller at Wells Fargo Advisors.

Marcouiller said the catalyst could come from Japanese efforts to restore electricity to the stricken Fukushima nuclear power plant damaged in last Friday's 9.0-magnitude earthquake and ensuing massive tsunami.

Japanese engineers were attempting to reactivate its cooling system to avert a nuclear catastrophe.

The market got a early injection of confidence on news that new claims for US unemployment benefits fell last week.

Initial jobless claims dropped to 385,000 in the week ending March 12, a decline of four percent from the prior week, the Labour Department reported.

That continued a trend of improvement in the ailing labour market.

Among the main winners of the day were Hewlett-Packard, which rose 3.6 percent, and Toyota's US-traded shares, which bounced back 2.7 percent.

The bond market fell.

The yield on the 10-year Treasury bond rose to 3.27 from 3.21 percent late Wednesday, while that on the 30-year bond rose to 4.43 percent.