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Record rise for stocks before employment report

U.S. stocks closed at record highs on Thursday, with both the Dow and the S&P 500 advancing further into uncharted territory, after the European Central Bank moved to combat disinflation and investors looked to Friday's employment report.

"With the service sector quite strong, I think the jobs will surprise," said Peter Cardillo, chief market economist at Rockwell Global Capital. "The jobs market, unless it's overly strong or extremely weak probably could be less of an event as opposed to today's ECB meeting."

"This was a historic move by a major central bank," Mark Luschini, chief investment strategist at Janney Montgomery Scott, said of the ECB's decision to cut its key lending rate to 0.15 percent from 0.25 percent and the overnight deposit rate to 0.1 percent from zero, as policy makers attempt to fend off deflation in the region.

The added measures that have the ECB offering banks cheap, long-term funding so long as they use it to hike lending to companies were intended to provide "liquidity into the corporate marketplace, where banks have been reluctant lenders," said Luschini.

"Now we're looking at tomorrow's unemployment report. The news cycle only lasts five minutes. The market is anticipating, and I think correctly so, that the jobs number should be good, or somewhere around 200,000 in new jobs," said Paul Nolte, a senior vice president and portfolio manager at Kingsview Asset Management.

"Certainly based on the weekly jobless claims number, the jobs picture looks good," said Nolte of Thursday data that showed fewer Americans filed for unemployment benefits during the past month than at any time in seven years.

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"Everything they (the ECB) did has been talked about forever. The euro is barely down, and that is the figurehead for what has been priced in or not priced in. U.S. equity investors should be taking their cue from the euro," said Peter Boockvar, chief market analyst at the Lindsey Group.

After weakening against the dollar, the euro hovered at 1.37 dollars per euro, while the 10-year U.S. Treasury yield used in figuring mortgage rates and other consumer loans down 2 basis points at 2.584 percent.

U.S. Securities and Exchange Commission Chair Mary Jo White announced Thursday afternoon that, for the first time, the organization would establish stricter rules for high-speed trading and dark pools.

"Announcements like that are somewhat taken under consideration. Alternatives in the marketplace are obviously a very bullish sign for the equity market," Cardillo said. "In the climate that we're in now of low interest rates, I don't think (new regulations are) going to matter."

Symbol
Name
Price
 
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DJIA
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S&P 500
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NASDAQ
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After rising to an intraday record 16,845.81, the Dow Jones Industrial Average ended at 16,836.11, up 98.58 points, or 0.6 percent, with Caterpillar pacing blue-chip gains that included 27 of its 30 components.

The S&P 500 rose 12.58 points, or 0.7 percent, to 1,940.46, after hitting an intraday record of 1,941.74. Industrials paced sector gains that extended to all of 10 major industry groups.

Joy Global rallied and led S&P 500 gains after the mining-equipment maker reported a better-than-expected quarterly profit. PVH fell after the the company behind the Calvin Klein and Tommy Hifiger brands reduced its profit outlook. Shares of General Motors edged upward after the auto manufacturer said it would start a compensation program for victims as a result of faulty ignition switches linked to at least 13 deaths.

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"Stocks or averages that make new highs attract buyers and then they move higher. The S&P 'to 2,000' is being heard from various observers. Perhaps in the near term I will be writing, a funny thing happened on the way to the promised land," wrote Elliot Spar, market strategist at Stifel, Nicolaus & Co.

Erasing losses, the Nasdaq advanced 44.58 points, or 1.1 percent, to 4,296.23.

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For every stock falling, nearly four rose on the New York Exchange, where nearly 629 million shares traded. Composite volume topped 3.1 billion.

On the New York Mercantile Exchange, crude-oil futures fell 0.06 percent to $102.58 a barrel; gold futures jumped $9.20, or 0.74 percent, to $1,253.40 an ounce.

Ahead of Thursday's open, stock futures held gains after the U.S. government reported jobless claims rose by 8,000 to 312,000 last week.

Separate data had Challenger, Gray & Christmas reporting employers announced plans to cut payrolls by 52,961 in May.

—By CNBC's Evelyn Cheng and Kate Gibson

Coming Up This Week:

FRIDAY: Nonfarm payrolls, consumer credit, Wal-Mart shareholders mtg

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