Stocks rally as job market stays strong

A relatively light day of trading on Wall Street ended Thursday with a broad rally for stocks as investors welcomed new jobless benefits data that shows the labor market remains strong.

The S&P 500 rose 1.7%, with roughly 95% of stocks withinthe benchmark index closing higher. The gains more than made up for the index’s losses the previous two days, the latest oscillation in what has been a volatile, holiday-shortened week for stocks.

The Dow Jones Industrial Average rose 1% and the Nasdaq composite gained 2.6%.

Technology stocks, which are down 29% this year, powered much of the rally. Apple and Microsoft each rose 2.8%.

Tesla jumped 8.1% as it continued to recover from steep losses Tuesday following reports it temporarily suspended production at a factory in Shanghai. The stock is still down nearly 66% for the year.

Investors have been hoping for a “Santa Claus” rally.

That’s Wall Street’s term for when stocks rise in the last five trading days of December and first two of January. Even a late rally likely wouldn’tchange the broader market’s trajectory for the month.

Every major index is headed for a loss in December that will cap a dismal year. While companies in the S&P 500 raked in record profits this year, investors in the benchmark index will see a roughly 20% loss in 2022, which would mark its worst year since 2008.

Still, going back to World War II, history suggests the market may fare better next year, said Sam Stovall, chief investment strategist at CFRA.

“When you look at down years for the market, history offers some encouragement in that the market is up an average of 14% in the following year and has risen in price more than 80% of the time,” Mr. Stovall said.

The S&P 500 rose 66.06 points to 3,849.28. The Dow added 345.09 points to 33,220.80. The Nasdaq rose 264.80 points to close at 10,478.09.