U.S. stocks soared Thursday as the government came closer to approving a $2 trillion stimulus package to combat the coronavirus pandemic, capping a three-day rally that has pushed the Dow Jones Industrial Average into a bull market.

The Dow industrials finished the day up 1,351.62 points, or 6.4%, to 22552.17, launching the blue-chip index back into bull-market territory. The jump ends an 11-trading day bear market for the index—the shortest in history for the Dow—which reached its bear-market low three days ago.

The...