By Caitlin Ostroff

U.S. stocks edged higher Thursday after fresh data showed that the labor market is continuing its slow and halting recovery.

The S&P 500 ticked up 0.2%, indicating that the broad market gauge might be on track to break two consecutive days of muted losses. The Nasdaq advanced 0.5%, and the Dow Jones Industrial Average rose 0.1%.

Continued progress toward passing a $1.9 trillion stimulus package in the U.S. is bolstering sentiment as investors expect it to further cushion the economic impact of Covid-19 lockdowns. While some data has shown signs of improvement in the labor market, investors expect the elevated jobless claims figures to support the need for more stimulus.

Fresh data showed that 793,000 Americans applied for first-time unemployment benefits in the week ended Feb. 6. New applications for the prior week were revised higher to 812,000.

"There is still obviously a significant number of jobs that have been lost, and there is clearly a need for more fiscal support," Shoqat Bunglawala, head of multiasset solutions, international, at Goldman Sachs Asset Management, said before the data was released.

Federal Reserve Chairman Jerome Powell said Wednesday that the central bank will continue to bolster the economy with low interest rates and hefty asset purchases as it focuses on the strength of the labor market. The U.S. unemployment rate fell to 6.3% in January from 6.7% a month earlier. That compares with a 3.5% unemployment rate in February 2020, before the pandemic struck.

The corporate earnings season remains under way. Walt Disney will report earnings after markets close.

Broadly positive quarterly earnings have supported markets, investors said.

The "U.S. earnings season has really been phenomenal," said Daniel Morris, chief market strategist at BNP Paribas Asset Management. "There are fundamental reasons for stocks to go higher."

Ahead of the opening bell, Zillow Group climbed almost 13% after the home-sales website reported a 27% rise in traffic to its sites in the fourth quarter and earnings that beat expectations.

Kraft Heinz rose 2% after it reported fourth-quarter earnings that beat expectations. Hormel Foods said it agreed to purchase the Planters nut business from Kraft Heinz for $3.35 billion in cash.

Bank of New York Mellon shares rose over 2% after The Wall Street Journal reported that the nation's oldest bank will hold, transfer and issue bitcoin and other cryptocurrencies on behalf of its asset-management clients. Mastercard also gained more than 2% after the company said Wednesday it is preparing to support cryptocurrencies directly on its network this year.

Shares of Uber Technologies fell about 1% in premarket trading after the San Francisco-based company's 2020 revenue showed that the coronavirus pandemic crushed its core ride-hailing operations.

In bond markets, the yield on the 10-year Treasury note ticked higher to 1.140%, from 1.133% Thursday. Yields rise when prices fall.

Overseas, the Stoxx Europe 600 benchmark rose 0.4%.

The yield on 10-year Italian government bonds fell to near an all-time low of 0.481% Thursday, from 0.501% Wednesday, according to data from Tradeweb. Investors have become more optimistic about Italy's growth outlook since former European Central Bank President Mario Draghi, widely credited with saving the euro during the region's debt crisis over the last decade, was tapped to become Italy's next prime minister.

In Asia, Hong Kong's Hang Seng rose almost 0.5% by the close of trading, and Australia's benchmark S&P/ASX 200 ticked 0.1% lower. The Japanese, Chinese and South Korean markets were closed for a holiday.

Write to Caitlin Ostroff at caitlin.ostroff@wsj.com

(END) Dow Jones Newswires

02-11-21 0946ET