Stocks rebound on stronger labor, earnings data

Stocks turned higher Thursday, snapping a two-day losing streak as investors cheered the latest crop of corporate earnings and encouraging labor market data.

The Dow Jones industrial average gained 225 points, or 1.3 percent, to close at 17,416. The Standard & Poor's 500 added 19 points, or 1 percent, to 2,021, while the Nasdaq composite climbed 24 points, or 1 percent, to 4,683.

"We've had a bit of a turnaround since the lows we saw earlier in the day," said Anastasia Amoroso, global market strategist at J.P. Morgan Funds. "It appears earnings outside of energy [stocks] have been rather strong."

U.S. government bond prices fell. The yield on the 10-year Treasury note rose to 1.76 percent from 1.72 percent late Wednesday.

Benchmark U.S. crude fell 12 cents to $44.34 a barrel in New York. The contract lost $1.78 on Wednesday to close at $44.45, after the Energy Department reported that U.S. oil inventories rose to their highest levels ever recorded.

The U.S. government reported that weekly claims for unemployment benefits dropped to the lowest level in almost 15 years last week, a sign that hiring will likely remain healthy. That could bolster the case for the Federal Reserve to raise interest rates from near zero sooner, rather than later, said Doug Cote, chief market strategist for Voya Investment Management.

"The market is reacting to the Fed being intent on normalizing interest rate policy, and today's numbers added to that pressure," Cote said.

Higher interest rates tend to make stocks less attractive in comparison to bonds.

Nine of the 10 sectors in the S&P 500 rose, and safe-harbor utilities gained the most. Energy stocks were the biggest decliners. The sector is down 6.3 percent this year amid sharply lower oil prices.

Ford, Harley-Davidson, Coach and Ally Financial were among the companies that reported quarterly financial results that exceeded Wall Street's expectations.

Several homebuilders surged after PulteGroup reported that completed home sales increased 7 percent in the October-December quarter.

McDonald's stock climbed 5 percent, up $4.49 to 93.27, following news late Wednesday that CEO Don Thompson is stepping down. The world's biggest hamburger chain has been struggling to hold onto customers amid intensifying competition and changing attitudes about food.

A scathing report by regulators in China claimed e-commerce giant Alibaba failed to prevent fake goods from being sold on its websites. Further muddying the water was a disclosure that the report was delayed to avoid affecting Alibaba's $25 billion New York stock market listing. Meanwhile, Alibaba reported adjusted fourth-quarter earnings that beat expectations as its user base continued to grow and shoppers bought more on mobile phones. The stock fell $8.64, or 8.8 percent, to $89.81.