NEW YORK (MarketWatch) — U.S. stocks surged on Thursday, with the S&P 500 clearing the prior day’s drop to close at a record, after the European Central Bank cut its benchmark interest rate and U.S. jobless claims unexpectedly declined to a five-year low.

“Stocks are certainly responding to additional global-central-bank easing trends, and the additional tough talk from [ECB President] Mario Draghi that they’ll keep rates low as long as they need to,” said Jim Russell, senior equity strategist for U.S. Bank Wealth Management in Cincinnati.

“ ‘Fiscal policy is working against monetary policy at this point.’ ” — Jim Russell, U.S. Bank Wealth Management

“The jobless-claims numbers were encouraging, especially in that we’re very hopeful that maybe we can beat the consensus” in Friday’s nonfarm-payrolls report, Russell added.

General Motors Co. GM, +0.04% gained 3.3% after the auto maker reported earnings and Facebook Inc.’s FB, -3.80% shares rose 5.6% after the social-network operator reported sales that beat estimates.

The Dow Jones Industrial Average DJIA, -0.70% rallied 130.63 points to 14,831.58, with all but three of its 30 components in positive turf.

Markets tackle ECB rate cut

Shares of Intel Corp. INTC, -0.15% edged higher after the Dow component and computer-chip manufacturer picked its chief operating officer, Brian Krzanich, to take the helm as CEO.

After rising to a record intraday high of 1,598.60, the S&P 500 index SPX, -1.15% added 14.89 points to 1,597.59, a level that has it fractionally above its all-time close of 1,597.56 hit on Tuesday.

Technology led gains and utilities proved the weakest performer among its 10 sectors.

The Nasdaq Composite COMP, -1.58% climbed 41.49 points to 3,340.62.

For every stock falling, more than three gained on the New York Stock Exchange, where 676 million shares traded.

Composite volume neared 3.4 billion.

Commodity prices gained along with U.S. equities and the dollar, with the price of oil futures CLM23, +0.57% leaping $2.96 to $93.99 a barrel and gold futures GCM23, rising $21.40 to $1,467.6 an ounce.

Central-bank moves

The European Central Bank’s governing council on Thursday reduced the primary refinancing rate to 0.5% from 0.75%, as anticipated.

At a news conference, ECB President Draghi “seemed more open to a cut in the deposit rate and it is this that drove the euro lower after trading choppily initially,” said Marc Chandler, global head of currency strategy at Brown Brothers Harriman. The euro EURUSD, +0.24% fell against other currencies including the U.S. dollar DXY, -0.26% .

“Draghi needed to do something; he used the press conference effectively to buoy the markets,” said Phil Orlando, chief equity strategist at Federated Investors.

The ECB rate cut is a step in the right direction, but it will not be the “singular solution that Europe is looking for,” said Russell, citing the region’s structural and political difficulties.

The ECB move comes a day after the Federal Reserve said it would continue buying $85 billion in bonds each month, but was ready to increase or cut the amount, depending on the economy.

“Fiscal policy is working against monetary policy at this point,” said Russell, noting the Fed made clear in its statement Wednesday that sequestration was hindering U.S. economic growth.

Federated’s Orlando concurred, saying “whoever thought raising taxes and cutting spending would be sound policy in a down economy missed economics 101 class that day.”

The Labor Department reported initial applications for unemployment benefits last week fell by 18,000 to 324,000, their lowest level since January 2008.

On Friday, the government will release nonfarm payrolls for April, with the report expected to show the unemployment rate stayed at 7.6% and the economy created 135,000 jobs after a rise of 88,000 in payrolls the month before.

“The markets would respond constructively to a number in the 175,000 to 200,000 or better range,” said Russell.

Other reports Thursday had the productivity of American workers rising in the first quarter and the U.S. trade deficit narrowing in March.