US stock markets surged into Thursday's close, extending the prior session's manic rally on bright profit reports from the likes of Nokia Corp., Starbucks Corp., and Dow component Walt Disney Co., while a $ 4.4 billion deal helped offset worries about the credit climate.

Dow component Hewlett-Packard Co. gained 3.2% after Bank of America started coverage of the firm with a buy rating. BofA also initiated coverage of Dow stock IBM, but offered a neutral rating, citing IBM's valuation. IBM ended 1.2% up.

Trading was volatile again, but not to the extreme seen over the past week. The Dow and the Nasdaq composite mostly stayed in positive territory for much of the session. Profits from companies like Nokia Corp. came in better than expected, and the Labor Department said jobless claims rose last week by a slightly smaller number than economists predicted. The numbers all helped steady a market that has seen stability in short supply.

Analysts said the jobless report in particular helped stocks, as it indicated that the labor market is holding up. The figures were released a day before the government's highly anticipated July employment report, to be issued before the start of trading on Friday.

The Dow rose 100.96, or 0.76%, to 13,463.33. The Standard & Poor's 500 index picked up 6.39, or 0.44%, closing at 1,472.20, while the Nasdaq composite index rose 22.11, or 0.87%, to 2,575.98. Bonds were little changed, with the yield on the benchmark 10-year Treasury note at 4.79%, the same as late Wednesday.

The blue chip index, now about 4% below the record close it reached in early July, has seen triple-digit swings become the norm in recent weeks as investors received a series of unpleasant reports about the mortgage and corporate lending markets. Stocks have been up-ended by concerns not only about the fallout from mortgage defaults, but also that credit will be less available to fund the merger deals that helped power Wall Street higher this year.