NEW YORK (Reuters) - U.S. stocks climbed on Thursday as energy shares bounced with oil prices, while news Pfizer would buy Hospira in a massive deal also lifted investor sentiment.
Adding to the upbeat tone, weekly jobless claims rose less than expected last week. The report comes on the heels of a private payrolls report that fell short of expectations on Wednesday and ahead of a monthly employment report on Friday.
Oil prices bounced from the prior session's selloff, with U.S. crude up 5.6 percent to $51.15, while the S&P energy index jumped 1.3 percent.
"Anytime you have M&A it's always positive for the market, and of course you have oil prices rebounding," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York. "From a technical perspective, the market has been doing pretty good, and the earnings season is winding down ... and in general it wasn't all that bad."
Pfizer said it would buy Hospira Inc for about $15 billion to boost its portfolio of generic injectable drugs and copies of biotech medicines. Hospira shares rocketed 35.1 percent to $87.56 as the best performer on the S&P 500, while Pfizer gained 1.9 percent $32.69 as one of the biggest boosts to the index.
The Dow Jones industrial average rose 152.33 points, or 0.86 percent, to 17,825.35, the S&P 500 gained 15.45 points, or 0.76 percent, to 2,056.96 and the Nasdaq Composite added 30.11 points, or 0.64 percent, to 4,746.81.
The S&P 500 has been volatile recently due to swings in crude prices and developments in Greek debt negotiations. Greece said on Thursday it would not be "blackmailed" by its European Union partners but it wanted to find a joint solution to its debt and austerity crisis.
Other data showed the U.S. trade deficit in December widened to its highest since 2012, which could damp down the fourth-quarter growth estimate, and nonfarm productivity fell more than expected in the fourth quarter.
Michael Kors shares fell 2.8 percent to $69.38 after the luxury accessories retailer posted third-quarter results and forecast a lower-than-expected profit for the current quarter.
Advancing issues outnumbered declining ones on the NYSE by 2,162 to 823, for a 2.63-to-1 ratio; on the Nasdaq, 1,880 issues rose and 784 fell, a 2.40-to-1 ratio.
The S&P 500 was posting 38 new 52-week highs and 2 lows; the Nasdaq Composite was recording 76 new highs and 28 lows.
Editing by Bernadette Baum and Nick Zieminski