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In its biggest point gain in three months, the Dow returned above the 10000 threshold on Thursday as Wall Street's economic optimism was shored up by upbeat productivity and labor figures and a bullish quarterly report from tech bellwether Cisco Systems. 

Today's Markets

The Dow Jones Industrial Average rose 203.82 points, or 2.08%, to 10005.96, the S&P 500 gained 20.13 points, or 1.92%, to 1066.63 and the Nasdaq Composite picked up 49.80 points, or 2.42%, to 2105.32. The consumer-friendly FOX 50 added 13.58 points, or 1.77%, to 780.27.

The triple-digit buying binge, which returned the Dow to the 10000 level for the first time in two weeks, began amid the latest signs of an economic recovery: the government said initial jobless claims fell last week to the lowest level of the year and productivity rose in the third quarter at the fastest pace in six years.

“This morning’s productivity number was a harbinger of a leaner, more efficient and profitable economy,” said Peter Kenny, managing director at Knight Capital Group.

The big gains, which may set high expectations for Friday's all-important jobs report, break a streak of back-and-forth action as the Dow hadn't closed in the green in consecutive days since October 15. After suffering sizable losses last week, the blue-chip index is up almost 293 points this week, leading some to say the brief slump could be over for now. 

“It’s very possible we just finished this very shallow and very short correction. It’s possible we could be onwards and upwards” depending on Friday’s jobs report, said Paul Nolte, managing director at Dearborn Partners. “The mini correction might be over for at least a period of time.”

The Dow, which enjoyed its biggest point gain since July 15, was led by financial components American Express (AXP) and JPMorgan Chase (JPM). Industrial companies like Boeing (BA) and DuPont (DD) also jumped. Defensive stocks like drug makers Merck (MRK) and Pfizer (PFE) closed higher but with lighter gains. 

But the Nasdaq Composite enjoyed even heavier buying as tech stocks like Garmin (GRMN) and eBay (EBAY) rallied around the earnings news. 

Wall Street cheered a new Labor Department report that revealed third-quarter productivity jumped in the third quarter by 9.5%, outpacing economists' forecasts and representing the fastest pace in six years. While the data underscores the amount of job cuts the U.S. has suffered, they also point to the improved cost structure of Corporate America and increased profitability down the road. 

"Investors are realizing that this is good, that we can have a jobless recovery because companies are leaner and meaner," Matt McCall of Penn Financial Group told FOX Business. 

At the same time, the government said initial jobless claims slumped by 20,000 last week to 512,000 -- the lowest level of 2009 and beating consensus estimates. Continuing claims, which are filed by people on unemployment insurance for more than a week, fell by an in-line 68,000 to 5.749 million on a seasonally-adjusted basis. 

Coupled with the ADP private employment report a day ago, the new data could be a good sign ahead of Friday's jobs report, which is expected to show the U.S. lost 175,000 jobs lost in October, pushing the unemployment rate to 9.9%. 

“I think a lot of the worries are starting to ago away little by little,” NSYE trader Doreen Mogavero told FOX Business. “Overall, the economic data is good. The thing we have to remember is we are recovering, we have not recovered.”

Cisco, which is seen as a barometer of the economy, helped set the stage for the tech rally late Wednesday when it beat the Street with non-GAAP EPS of 36 cents a share. While its net income tumbled 19% last quarter, it projected revenues would rise 1% to 4% in the current quarter, exceeding consensus estimates. Cisco CEO John Chambers was once again upbeat, saying an economic recovery "is well underway" and the economic improvements were "gaining momentum" world-wide.

Thursday’s rally is also noteworthy in that it largely came without the support of a weaker dollar, which closed flat but had been crucial to most big upward moves over the past several months. "If the dollar is flat on a day like today…. That’s pretty encouraging,” said Kenny.

Boosted by the Federal Reserve's signal that interest rates will stay "exceptionally low," gold climbed to another new all-time high. Gold gained $2.00 an ounce, or 0.18%, to $1088.70. Halting a three-day win streak, crude slid 78 cents a barrel, or 0.97%, to $79.62.

Meanwhile, Wall Street shrugged as a slew of retailers reported mostly weaker-than-expected same-store sales reports for October. According to Thomson Reuters, same-store sales rose 1.8% after last year’s weak results, missing the Street’s expectation for a 2% gain.

Corporate Movers

IMS Health (RX) unveiled a $5.2 billion deal to be acquired by private equity firms TPG Capital and Canadian Pension Plan, representing a 50% premium to its stock price the day before M&A chatter began. The $22-a-share deal, which includes the assumption of some debt, is expected to close by the end of the first quarter of 2010. 

Target (TGT), the largest discount retailer to report monthly results, missed expectations with a 0.1% decline in same-store sales for October

Toyota (TM) exceeded estimates with a net profit of $241 million last quarter, which was down 84% from a year ago. It marked the first quarterly profit for the Japanese auto giant this year. However, the company also now sees a full-year loss of 350 billion yen, missing consensus estimates.

CVS Caremark (CVS) plunged 20% after CEO Tom Ryan said in an earnings call his company had some "big client losses" in its pharmacy benefits business for the 2010 selling season, Dow Jones Newswires reported. CVS also said the Federal Trade Commission is investigating its business practices. The comments come after the company beat the Street with non-GAAP EPS of 65 cents and an 18.1% jump in revenue to $24.64 billion. 

Time Warner Cable's (TWC) net income slumped 11% during the third quarter to 76 cents a share, narrowly topping consensus estimates. The No. 2 U.S. cable operator said its revenue rose 4% to $4.5 billion, also exceeding expectations. The former Time Warner (TWX) unit offset slumping video subscriptions with an infusion of voice and Internet customers.

Orbitz Worldwide (OWW) traveled back into the black during the third-quarter but its EPS of 8 cents missed the Street's view of 12 cents. The online travel site's revenue slumped by a worse-than-expected 22% to $187 million. Orbitz also said it received $100 million in equity investments from PAR Investment Partners and Blackstone (BX) controlled Travelport. 

Dr. Pepper Snapple (DPS) reported a better-than-expected 42% jump in net income on lower costs. The results translated to non-GAAP EPS of 54 cents, topping the Street's view of 49 cents. However, the beverage company's sales of $1.4 billion narrowly missed consensus expectations. Dr. Pepper forecasted weaker-than-expected full-year non-GAAP EPS of $1.92 to $1.96.

Global Markets

European markets turned around after the Bank of England and the European Central Bank left interest rates unchanged. The London's FTSE 100 gained 0.35% to 5125.64, Paris' CAC 40 rose 1.05% to 3708.73 and Germany's DAX gained 0.67% to 5480.92. 

In Asia, Japan's Nikkei 225 lost 1.29% to 9717.44, Hong Kong's Hang Seng slipped 0.63% to 21,479.08 and China's Shanghai Composite jumped 0.85% to 3,155.05.