* Dow hits third straight intraday record high
* Financials strongest sector on day, BofA gains
* Jobless claims unexpectedly fell last week
* Dow up 0.2 pct, S&P 500 up 0.2 pct, Nasdaq up 0.3 pct
By Ryan Vlastelica
NEW YORK, March 7 (Reuters) - U.S. stocks closed modestly
higher on Thursday, with the Dow ending at a record for a third
straight day as jobless claims data pointed to a pick-up in the
labor market's recovery a day before the closely watched
The Dow and the S&P 500 were both up for their fifth
straight days as investors looked for opportunities to buy into
the recent rally. However, caution ahead of the jobs report
curbed gains and kept the S&P more than 1 percent below its
"Today's move is pretty tranquil. No one is going to take
big positions ahead of tomorrow's number, but the market is
definitely in an uptrend," said Paul Zemsky, the New York-based
head of asset allocation at ING Investment Management.
Growth-oriented sectors led the day's gains. The S&P
financial index added 0.7 percent and hit an intraday
high. Shares of Dow component Bank of America rose 2.9
percent to $12.26 while JPMorgan Chase & Co added 1.2
percent to $50.63.
A strengthening economy and loose monetary policy by central
banks around the world have pushed U.S. stocks higher this year.
Investors have kept buying into the market since Tuesday's
rally, but gains have been more subdued.
Worries remain as Washington debates the path of fiscal
policy, the euro zone is not out of its crisis, and U.S.
economic growth remains anemic.
However, the latest economic data was encouraging, as the
number of Americans filing claims for unemployment benefits
unexpectedly fell last week to a seasonally adjusted 340,000. It
was the second straight week of declines.
Investors will stay focused on the labor market ahead of
Friday's non-farm payrolls report, which is expected to show the
U.S. economy added 160,000 jobs in February. While it has been a
soft spot in the economic recovery, the labor market is seen as
"If payrolls disappoint, we'll have a pullback, but that
won't be enough to derail the rally," said Zemsky, who helps
oversee $170 billion. "If the report is strong, markets still
have room to grow."
The Dow Jones industrial average rose 33.25 points,
or 0.23 percent, to 14,329.49, a record closing high. The
Standard & Poor's 500 Index added 2.80 points, or 0.18
percent, to 1,544.26. The Nasdaq Composite Index gained
9.72 points, or 0.30 percent, to end at 3,232.09.
During Thursday's session, the Dow climbed as high as
14,354.69 - its third straight intraday record high.
The Dow is up 9.4 percent so far this year, while the S&P
500 is up 8.3 percent.
The Russell 2000 Index, which measures the
performance of 2,000 U.S. small-cap companies, closed at a
record high in Thursday's session, as did the Russell 1000
and the Russell 3000.
In a separate report on Thursday, the Commerce Department
said the U.S. international trade deficit widened more than
expected in January as crude oil imports rose and fuel oil
exports fell. In contrast, the department cut its estimate of
the December trade gap.
Shares of network equipment maker Ciena jumped 17.3
percent to $17.53 after the company reported a smaller quarterly
Retail stocks were among the most active following February
same-store sales. Gap Inc jumped 4.1 percent to $35.87
as its results were stronger than expected, while Zumiez
slid 4.8 percent to $22 on a weak report.
Teen apparel retailer Hot Topic Inc said it will be
bought by private equity firm Sycamore Partners for about $600
million. Shares surged 29 percent to $13.87.
Time Warner Inc rose 2.4 percent to $56.78 after the
company said it would spin off its magazine unit, ending weeks
of merger talks with Meredith Corp. Meredith fell 6.2
percent to $37.82.
On the down side, shares of PetSmart fell 6.6
percent to $62.18 after the company's full-year profit forecast
missed analysts' estimates. At least two brokerages cut their
price targets on the retailer's stock.
About 56 percent of stocks traded on the New York Stock
Exchange closed higher, while 58 percent of Nasdaq-listed shares
ended in positive territory.
Volume was light, with about 6.1 billion shares changing
hands on the New York Stock Exchange, the Nasdaq and NYSE MKT,
below the daily average so far this year of about 6.48 billion