Stocks finished higher and the S&P 500 closed at a record as the number of Americans filing for first-time unemployment benefits declined more than expected and U.S. manufacturing expanded but at a slower pace.
The Dow Jones Industrial Average finished up 131 points, or 0.38%, to 34,633.
The S&P 500 rose 0.52% in its sixth straight winning session and set an intraday record as well.
The tech-heavy Nasdaq ticked higher by 0.13%.
The jobless-claims figures were released a day ahead of the official U.S. jobs report for June. The Labor Department will issue the nonfarm payrolls report ahead of Friday's stock market open.
Jobless claims last week fell by 51,000 to 364,000, a fresh pandemic low, as the economy reopens and demand from businesses for new employees rises.
The "beat on jobless claims is a real bright spot. Not only did we print the lowest number since the pandemic began, but it also reverses the trend on misses that we’ve seen the past few weeks," said Cliff Hodge, chief investment officer for Cornerstone Wealth.
"Staying below that big-round-number 400k level could bolster confidence in risk taking during the dog days of summer," he added.
Manufacturing in June slipped to 60.6 in June, slightly below forecasts, from 61.2 in May, according to the Institute for Supply Management. A reading above 50 signals expansion.
Wall Street began the third quarter at record highs. The S&P 500 on Wednesday closed the second quarter with one of its best first-half showings in more than two decades.
The broad-market index rose 8.2% in the second quarter and jumped 14.4% in the first half. It has risen for five months in a row.
The strong showing for equities has been led largely by assurances from the Federal Reserve that it will remain accommodative by keeping interest rates low for a while longer as the economy rebounds from the coronavirus pandemic.
But worries have been creeping in that the central bank could pull back its support and begin tapering stimulus sooner rather than later as the economy strengthens.
At its meeting in June, the Federal Reserve left interest rates unchanged but signaled it expected to boost interest rates two times by the end of 2023. It also said it would continue to buy $120 billion of bonds monthly until “substantial further progress” had been made on employment and inflation.
The jobs report for June - the most closely watched economic indicator of any month - will be parsed by investors for signs of economic progress.
Oil prices, meanwhile, surged on a report that Saudi Arabia and Russia have a tentative deal to gradually increase OPEC+ output in the coming months.
West Texas Intermediate crude, the U.S. benchmark, rose 1.88% to $74.85 a barrel. Oil had risen as high as $76.22 on Thursday.
Investors knocked the stock even after the drugstore chain reported stronger-than-expected third-quarter earnings and boosted its full-year profit forecast. The report stemmed in part from a jump in total prescription fillings. Customers are returning to pharmacies as the coronavirus pandemic eases.