U.S. stocks jumped Thursday after better-than-expected jobs and housing reports.

The Dow Jones Industrial Average increased 0.76 percent to 12,884.75 by early afternoon trading, while the Nasdaq rose 1.01 percent to 2,945.17. The S&P 500 climbed 0.83 percent to 1,354.37.

Initial jobless claims for last week, which were reported earlier Thursday, fell for a third straight week to 348,000, the lowest level since March 2008, according to the U.S. Labor Department. Economists polled by Reuters expected an increase of 7,000 workers. Jobless claims have been below the 400,000 mark for 14 consecutive weeks.

It's further confirmation that the labor market is getting better, hiring is picking up and businesses are looking towards the future by adding more workers, Joel L. Naroff, president and founder of Naroff Economic Advisors, said in an interview before Thursday's report.

The U.S. Commerce Department said builders broke ground or more homes than previous anticipated in January. Starts rose 1.5 percent to 699,000, compared to December's 689,000. A Bloomberg survey estimated 675,000 starts. Furthermore, U.S. 30 year fixed-rate mortgages remained at a record low 3.87 percent for the third consecutive week, Freddie Mac announced.

The largest gainers in the Dow Jones Industrial Average were Microsoft, up 3.64 percent to $31.15, and Bank of America, up 2.59 percent to $7.98. The only Dow component to fall was Boeing, down 0.19 percent to $75.07.

The stock market ignored Moody's warning it could downgrade 17 global banks -- including some based in the U.S. -- because of deteriorating creditworthiness due to the Eurozone debt crisis. Shares of Morgan Stanley were up 0.58 percent to $19.07, while shares of Goldman Sachs rose 1.33 percent to $114.70.  Both banks were cited as being placed under review, as was Bank of America.

Moran Zhang contributed to this article.