By Angela Moon
NEW YORK (Reuters) - The Dow and the S&P 500 ended at a new record on Thursday after the European Central Bank cut rates to record lows and pledged to do more if needed to fight off the risk of deflation.
Investors are now focused on Friday's U.S. payrolls report for May. It is expected to show job growth slowed last month and the unemployment rate ticked up, but not by enough to upset the view that the economy is bouncing back.
The number of Americans filing new claims for unemployment benefits rose last week, but the underlying trend continued to point to a firming labor market.
"The number of data we got this week so far on the labor market have not provided a clear direction for tomorrow's numbers," said Randy Frederick, managing director of trading and derivatives with the Schwab Center for Financial Research in Austin.
"So I wouldn't be surprised if the market sold on the (payrolls) news tomorrow, but it's likely to just be a knee-jerk reaction."
The day's gains were broad, with all ten S&P 500 sectors ending higher. Industrials rose 1.1 percent and financials 0.9 percent. The day's weakest sector was telecom, considered a defensive group, which rose less than 0.1 percent.
The Dow Jones industrial average rose 98.58 points or 0.59 percent, to 16,836.11, the S&P 500 gained 12.58 points or 0.65 percent, to 1,940.46 and the Nasdaq Composite added 44.59 points or 1.05 percent, to 4,296.23.
With Thursday's advance, the S&P has risen in nine of the past 11 sessions, up 3.6 percent over that period, and ended at a record high five times in the past six sessions.
The ECB cut the deposit rate to -0.10 percent and launched a series of measures to pump money into the sluggish euro zone economy. It stopped short of full-fledged quantitative easing (QE) - printing money to buy assets - but ECB President Mario Draghi said more action would come if necessary.
Also supporting the day's gains, hedge fund manager David Tepper was reported by CNBC as saying the ECB partly "alleviated" his concerns about the market, after having said last month he was worried stock prices were stretched.
Amazon.com Inc revived speculation about its next major product on Wednesday, using a mysterious YouTube video and website post to tease a June 18 "launch event" in Seattle to be hosted by CEO Jeff Bezos. The stock jumped 5.5 percent to $323.57.
Sprint has agreed to pay about $40 per share to buy T-Mobile US, marking further progress in the attempt to merge the third and fourth-biggest U.S. mobile network operators, a person familiar with the matter told Reuters on Wednesday. Sprint shares fell 4 percent to $9.02 while T-Mobile US dropped 2.3 percent to $33.49.
Rite Aid shares slid 7.4 percent to $7.87 after it estimated first-quarter profit much below expectations.
Ciena Corp shares jumped 18.4 percent to $22.48 after the company posted earnings that beat expectations and gave a revenue outlook above forecasts.
Trading volume was around 5.91 billion shares on U.S. exchanges, slightly above last month's average of 5.75 billion, according to data from BATS Global Markets.
(Reporting by Angela Moon; Editing by Nick Zieminski)