U.S. stocks rallied robustly for a second day Thursday on surged earnings of giant firms, as jobless claims fell to the lowest level in nearly four months.

At the closing bell, the Dow Jones Industrial Average jumped 198.27, or 1.83 percent, to 11,015.19, hitting the biggest gain this year and surpassing the closely watched 11,000 level. The Standard &Poor's 500 index gained 26.12, or 2.12 percent, to 1,256. 16. The Nasdaq composite index surged 58.15, or 2.79 percent, to 2, 144.15.

Federal Reserve Chairman Ben Bernanke said Thursday that the growth of U.S. economy may slow down as energy prices continue an upward trend and push inflation higher. The U.S. economy has been "remarkably flexible" with regard to the continued spike of energy prices, he said.

The Labor Department reported that jobless claims fell to 295, 000 last week, the lowest level in nearly four months. Wall Street economists had forecast a rise to 320,000 from an initially reported 302,000 for the prior week, which contained the Memorial Day holiday.

Meanwhile, U.S. industrial production declined by 0.1 percent in May following an increase of 0.8 percent in April, the Federal Reserve reported on Thursday. Traders saw the signs of a weakening economy, which could keep the Federal Reserve from raising interest rates much higher.

The unexpected 0.1 percent drop marked the first decline in U.S. industrial output since a similar 0.1 percent fall last January. Some analysts said it was a latest sign that U.S. economic growth was slowing down in the second quarter.

Source: Xinhua