NEW YORK ( TheStreet) -- Stocks sprinted ahead late in Thursday's session, and the Dow Jones Industrial Average closed with triple-digit gains for the second consecutive day. Markets were bolstered by June retail sales data and a better-than-expected drop in initial weekly jobless claims.

The Dow Jones Industrial Average added 121 points, or 1.2%, to 10,139. The S&P 500 gained 10 points, or 0.9%, to 1070, while the Nasdaq finished up by 16 points, or 0.7%, at 2175.

Earlier in the session, markets see-sawed, dipping briefly into negative territory as investors sought a comfortable trading range.

"Given the fact that we had such a huge move yesterday, it's not surprising that we're giving a little bit back," said Brian Belski, chief investment strategist at Oppenheimer Asset Management, pointing to Wednesday's broad-based rally that saw major U.S. averages close with 3% gains.

"Since people are so concerned about every little data point, it'll be interesting to see how they respond to second-quarter earnings next week," Belski said, adding that they could completely discount the results because companies have been so defensive with their guidance recently.

Separately, James Dailey, senior portfolio manager at the Team Asset Strategy Fund, agreed that a little consolidation on Thursday would be expected.

"I think it's healthy that we're getting some backtracking because yesterday was such an explosive day."

Dailey said he's also encouraged by what's going on in Europe and developments with the euro. He believes that markets could remain in a pretty good place once the oversold rally is out of the way.

"I definitely see some strength possible in the next week or so -- beyond that, we're less certain," he said.

World markets surged as the International Monetary Fund raised its 2010 global growth forecast to 4.6% from 4.1%. The IMF said that while economic recovery will likely be faster than expected, Europe's debt crisis could stall the rebound.

The Bank of England kept its base interest rate at a record low 0.5% for the 17th consecutive month and continued to leave its asset purchasing program on hold. The European Central Bank also held rates steady.

Overseas on Thursday, Hong Kong's Hang Seng rose 1% while Japan's Nikkei jumped 2.8%. The FTSE in London added 1.8%, and the DAX in Frankfurt gained 0.7%.

The Economy

Initial weekly jobless claims fell by 21,000, to 454,000, according to the Labor Department's report for the week ended July 3. Economists had been expecting claims to dip to 460,000, according to Briefing.com.
Unemployment

Same-store sales rose by 3.1%, which was slightly below the 3.2% boost that analysts had expected, according to Reuters. Retailers used sales promotions to lure customers to registers; the Retail HOLDRs ETF ( RTH) rose by 0.3%.

The Energy Information Administration said natural gas supplies gained 78 billion cubic feet in the week ended July 2, exceeding the injection range of 70 billion to 74 billion cubic feet that analysts polled by Platts had been expecting.

The EIA said crude oil inventories shed 5 million barrels in the week ended July 2, which beat analysts' expectations for a decline of 3.5 million barrels, according to a Platts survey. Gasoline supplies increased by 1.3 million barrels, as expected, while distillate stocks grew by 300,000 barrels, besting expectations for an increase of 1.9 million barrels.

Late Tuesday, the American Petroleum Institute estimated that oil supplies fell by 7.26 million barrels.

Company News

Capital goods and non-cyclical consumer stocks were showed the most strength during Thursday's session. On the Dow, Du Pont ( DD), McDonald's ( MCD), American Express ( AXP) and Boeing ( BA) put in the best performance.

Technology showed the mildest gains, which was reflected on the Dow with Intel ( INTC) being the only component to end in the red.

U.S. steel companies like Nucor ( NUE), Steel Dynamics ( STLD), U.S. Steel ( X) and AK Steel ( AKS) are poised to benefit from the removal of rebates on certain Chinese steel products, effective July 15.

Among retailers, Abercrombie & Fitch ( ANF), Aeropostale ( AEO) and Zumiez ( ZUMZ) surpassed June same-store sales estimates, while Gap ( GPS) and Buckle ( BKE) missed. Their stocks lost 7.6% and 9.8%, respectively.

BP ( BP) aims to fix its broken oil well in the Gulf of Mexico by July 27 -- weeks before the company's deadline -- in an effort to show it has capped its rising financial liabilities, according to a Wall Street Journal report.

Commodities and the Dollar

Following the EIA data, natural gas for August delivery lost 17 cents, or 3.6%, to settle at $4.40. Meanwhile, the August crude oil contract gained $1.37, or 1.9%, to settle at $75.44 a barrel.

Elsewhere in commodity markets, the August gold contract shed $2.70, or 0.2%, to settle at $1,196.10 an ounce.

The dollar was trading higher against a basket of currencies, with the dollar index up by 0.02%.

Treasuries

The benchmark 10-year Treasury was down 15/32, lifting the yield to 3.038%.

The two-year note was up 1/32, diluting the yield to 0.621%. The 30-year bond dropped 1 1/32, increasing the yield to 4.015%.

--Written by Melinda Peer in New York.

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