Stocks rose on Thursday as data showed continuing claims for jobless benefits dropped and a separate report revealed the trade gap unexpectedly narrowed for October, a boost to economic growth.

As trading volumes declined heading into the end of the year, analysts said investors who are showing gains for 2009 are cashing in profits or refraining from buying. Any dips in stock prices are being met by buyers hoping for more strength in the rally that has taken the broader market up more than 60 percent from March's 12-year low.

This is what the market has been doing for some time. Selloffs don't get very far and sidelined cash is there to come in, said Scott Marcouiller, senior equity market strategist at Wells Fargo Advisors in St. Louis.

United Technologies Corp led Dow industrials gainers, rising 1.3 percent to $68.31 after JPMorgan raised its price target to $74 from $70.

The Dow Jones industrial average <.DJI> rose 50.11 points, or 0.48 percent, to 10,387.16. The Standard & Poor's 500 Index <.SPX> gained 4.81 points, or 0.44 percent, to 1,100.76. The Nasdaq Composite Index <.IXIC> added 10.65 points, or 0.49 percent, to 2,194.38.

Though continuing claims fell, the U.S. Labor Department said initial jobless claims were pushed up by layoffs in seasonal industries last week to 474,000, above the 460,000 analysts had been expecting.

Other early morning data showed the U.S. trade deficit narrowed in October as the weak greenback helped boost exports and demand for imported oil fell.

(Editing by Padraic Cassidy)