NEW YORK: US stocks rebounded on Thursday one day after the Dow took its steepest drop in seven months, with positive economic data giving a boost to traders.
The Dow Jones Industrial Index added 161.29 points (1.39 percent) to 11,774.59 in closing trade, recouping some of the 487 points lost in the past three days.
The broad-based S&P 500 rose 16.84 points (1.34 percent) to 1,273.72, while the tech-heavy Nasdaq Composite gained 19.23 points (0.73) percent at 2.626.05.
The market got an 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.
The upward push reversed three days of steep losses, with the Dow dropping 240 points on Wednesday alone, driven by fears of meltdowns and radiation leaks at Japan's quake-stricken Fukushima nuclear plant, and tensions in the oil-rich Gulf as Shiites challenged the Sunni monarchy in Bahrain.
Analysts meanwhile shrugged off data showing a 0.1 percent fall in US industrial production and focused on numbers showing real improvement in manufacturing.
"Industrial production unexpectedly dropped in February, but the decline was due to the impact of milder weather on utilities. The report showed manufacturing activity continued to climb," said Scott Marcouiller of Wells Fargo Advisors.
"A report on mid-Atlantic factory activity was surprisingly strong, and leading economic indicators in the US increased for the eighth straight month," he said.
Energy stocks powered up in line with higher oil prices and prospects that Japan's energy mix over the long term could be less weighted on nuclear power.
ExxonMobil added 2.3 percent, and Chevron 2.7 percent, both erasing Wednesday's heavy losses.
On the other hand, nuclear technology vendor General Electric picked up 1.4 percent, to $19.22, after two days of sharp losses.
Meanwhile online retailing juggernaut Amazon took a 2.3 percent fall amid news reports on growing pressure for it to collect more sales taxes, one of its key advantages over brick-and-mortar shops which must collect them.
The bond market fell.
The yield on the 10-year Treasury bond rose to 3.25 from 3.21 percent late Wednesday, while that on the 30-year bond rose to 4.43 percent from 4.39 percent.
Bond yields and prices move in opposite directions.
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