Dow rallies 306 points, notches 5-day winning streak

  • The Dow Jones industrial average closed more than 300 points higher, with Boeing as the biggest contributor of gains.
  • The move higher took place despite interest rates reaching multi-year highs.
  • "The volatility we saw in that correction is here to stay," says one investor. "But frankly, the path of least resistance is still up and fundamentals haven't really changed."

U.S. stocks rose sharply in choppy trading Thursday as the major indexes extended their current winning streak to five days. The move higher took place despite interest rates reaching multi-year highs.

The Dow Jones industrial average closed 306.88 points higher at 25,200.37, with Boeing as the biggest contributor of gains. The 30-stock index traded down 84 points at its session low.

The S&P 500 gained 1.2 percent to finish at 2,731.20, with utilities and tech as the best-performing sectors. The broad index was also on pace for its best weekly gain since 2013.

The Nasdaq composite rose 1.6 percent to 7,256.43 after falling as much as 0.2 percent. Gains in Amazon, Netflix and Alphabet helped lift the tech-heavy index higher. The Nasdaq was also on track for its best week since 2011.

Both the Dow and S&P 500 also broke above their 50-day moving averages, two key technical levels.

The major averages all closed sharply higher on Wednesday, climbing back from the correction levels hit last week and notching a four-day winning streak.

"The volatility we saw in that correction is here to stay," said Maris Ogg, president at Tower Bridge Advisors. "We don't have the dampening mechanisms we had in previous years. ... But frankly, the path of least resistance is still up and fundamentals haven't really changed."

Last Thursday, the indexes closed 10 percent below record highs set Jan. 26. One of the factors cited by investors and traders was a surge in interest rates to levels not seen in years.

But Wall Street seems to be learning to live with higher rates. Stock futures traded higher despite the 10-year Treasury note yield hitting a new four-year high before the bell. On Wednesday, stocks and bond yields rose together.

"We're trying to reconcile an environment with higher rates and rising inflation," said Ernie Cecilia, CIO at Bryn Mawr Trust. "Volatility is going to continue. We're still trying to make a bottom but it's going to take some time."

Volatility has come back with a vengeance recently, following a year of unprecedented calm in the market. In its previous nine sessions, the S&P 500 has logged seven moves greater than 1 percent. The broad index posted just eight 1 percent moves during all of 2017.

Traders work on the floor of the New York Stock Exchange, (NYSE) in New York.
Brendan McDermid | Reuters
Traders work on the floor of the New York Stock Exchange, (NYSE) in New York.

On the data front Thursday, jobless claims increased by 7,000 to a seasonally adjusted 230,000, rebounding from a near 45-year low. The price producer index, meanwhile, rose 0.4 percent in January, in line with expectations.

In corporate news, Cisco Systems jumped 4.7 percent after reporting better-than-expected earnings. The company also posted its first year-over-year revenue increase in more than two years.

Sources told CNBC that Amazon is teaming up with Bank of America to provide loans to merchants. Amazon rose 0.7 percent, while Bank of America shares traded 0.3 percent higher.