NEW YORK — Investors are getting enthusiastic about stocks again after some reassuring news from the job market.
Stocks rose for a third straight day Thursday on the Labor Department’s report of a larger-than-expected drop in the number of newly laid-off people seeking unemployment benefits.
The Dow Jones industrial average rose 121 points after climbing 275 Wednesday and advancing modestly Tuesday. The 4.7 percent gain in that time is the Dow’s best three-day move since mid-May.
Employment news has been the key driver behind the market’s moves during the past few weeks. Thursday’s news was a welcome change from a string of disappointing jobs reports, including the government’s June employment numbers, that have pounded stocks recently.
The Labor Department said initial claims for jobless benefits dropped last week to their lowest levels since early May. Claims fell to 454,000, better than the 465,000 forecast by economists polled by Thomson Reuters.
High unemployment has hurt consumer confidence, which in turn has slowed spending. And because consumers account for about 70 percent of U.S. economic activity, the recovery is unlikely to gain much momentum unless consumers are working and feeling more secure about spending.
Retailers had mixed news about consumer spending. Several big retailers, including those that cater to teenagers, reported lackluster June sales. Others, including department-store operators Macy’s Inc. and JCPenney Co., saw a pickup in business.
Hank Smith, chief investment officer of equity at Haverford Investments, said some investors have been worried about a so-called double dip in the economy but that more recent data are a reminder that the recovery is continuing.
The Dow rose 120.71, or 1.2 percent, to 10,138.99. The Standard & Poor’s 500 index rose 9.98, or 0.9 percent, to 1,070.25, while the Nasdaq composite index rose 15.93, or 0.7 percent, to 2,175.40.
