The Institute for Supply Management found steady improvement in the manufacturing sector in March, raising the prospect of more hiring in the nation's factories. The ISM report, and another from the Labor Department showing a decline in new claims for unemployment benefits last week, suggest the job market may be improving.

Economists are watching for today's report on the number of new jobs created in March. Most want to see the economy add 200,000 to 300,000 new jobs for several months before declaring a recovery.

"The jobs report is going to be very big," said Michael Palazzi, managing director of equity trading at SG Cowen Securities. "We know how the market will react to a negative number, but it'll be interesting to see how it reacts to a positive number. We just don't know the extent of what we could see."

Analysts said the day's upward trend was solidified by the ISM report, which showed sustained momentum in the manufacturing sector, with strong orders and a ramp-up in production. The manufacturing index was 62.5 in March compared with 61.4 in February. Economists expected a figure of 59.5.

In other economic news Thursday, the Labor Department said wholesale prices ticked up 0.1 percent in February after a 0.6 percent rise in January — a moderate change that indicates inflation has remained in check even as the economy has grown. Separately, the Commerce Department reported a dip in construction spending in February, partly because of bad weather.