Mega-cap stocks Apple Inc, Microsoft Corp, Facebook Inc and Tesla Inc gained between 2.2% and 3.6%, recouping losses from a recent pullback and helping the benchmark S&P 500 surpass its Feb. 16 peak of 3,950.43.

The blue-chip Dow hit an all-time high for the fourth straight session, while the tech-heavy Nasdaq is now about 5% below its Feb. 12 record close after slumping as much as 12% from that level last week.

Fewer than expected Americans filed new claims for unemployment benefits last week as an improving public health environment allows more segments of the economy to reopen.

"The drop in jobless claims is another win for the week, and a solid sign that we're making some strides toward pre-pandemic life," said Mike Loewengart, managing director of investment strategy at E*TRADE Financial.

The benchmark Treasury yields were at 1.53% but below 1.6% ahead of an auction of U.S. 30-year debt later in the day. A weak seven-year auction in late February fueled inflation concerns and sent yields higher.

"The markets appear to have mostly adjusted (to higher yields). However, we still need to see how the market digests the 30-year auction today," Eric Merlis, head of global markets trading at Citizens, told the Reuters Global Markets Forum.

The Dow on Wednesday logged a record closing high for the first time in two weeks as tepid inflation numbers allayed fears that the economy is running too hot while a sweeping $1.9 trillion COVID-19 relief bill received a final nod from Congress.

Financial and industrials lagged on Thursday after outperforming other major S&P sectors this year as they are seen benefiting from a reopening economy. Tech and consumer discretionary, the two stay-at-home beneficiaries which had recently taken a beating, jumped 2.6% and 1.8%.

At 11:36 a.m. ET, the Dow Jones Industrial Average rose 354.47 points, or 1.10%, to 32,651.49, the S&P 500 gained 56.13 points, or 1.44%, to 3,954.94 and the Nasdaq Composite gained 325.20 points, or 2.49%, to 13,393.58.

Wall Street's fear gauge hit a two-week low at 21.65 points.

Bumble Inc jumped about 14% after it reported a bigger-than-estimated rise in fourth-quarter revenue and said it expected pent-up demand from people who had been avoiding dating in person due to the pandemic.

A so-called "meme" stock AMC Entertainment Holdings Inc gained 5% as the cinema chain said the roll-out of COVID-19 vaccines and the release of major movies would boost sales this year.

Oracle Corp slumped 7% as the business software maker's cloud division reported quarterly revenue that missed analysts' estimates on increased competition from Amazon.com Inc and Microsoft Corp.

Advancing issues outnumbered decliners by a 3.7-to-1 ratio on the NYSE and by a 3.6-to-1 ratio on the Nasdaq.

The S&P 500 posted 68 new 52-week highs and no new low, while the Nasdaq recorded 369 new highs and 18 new lows.

(Reporting by Shashank Nayar and Medha Singh in Bengaluru, additional reporting by Lisa Pauline Mattackal; Editing by Maju Samuel)

By Medha Singh and Shashank Nayar