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(Corrects paragraph 7 to remove extra word "to" before "asurprising 16,000" to read "dropped a surprising 16,000")
* Data points to recovery in U.S. jobs market
* Verizon rises on Reuters report of possible wireless bid
* 3M Co falls after earnings, outlook
* Indexes up: Dow 0.5 pct, S&P 0.7 pct, Nasdaq 0.9 pct
By Caroline Valetkevitch
NEW YORK, April 25 (Reuters) - U.S. stocks rose on Thursday,boosted by gains in shares of materials companies, includingiron ore producer Cliffs Natural Resources Inc, and by adrop in weekly jobless claims.
Cliffs jumped 20.6 percent to $21.97 after it postedearnings late on Wednesday that were much better than analystshad estimated. The S&P 500 materials index was up 1.4 percent.
Telecommuncations companies also rose following gains inVerizon Communications Inc. The stock rose 2.1 percent to$52.87 after sources told Reuters it has hired advisers toprepare a possible $100 billion cash and stock bid to take fullcontrol of Verizon Wireless from joint venture partner, VodafoneGroup Plc.
Companies reporting results in the past 24 hours lifted thegrowth forecast for S&P 500 companies quarterly earnings to 3.6percent. At the start of the reporting period the forecast wasgrowth of just 1.5 percent.
Investors have closely watched earnings to see if they wouldbe enough to extend the market's uptrend that began at the startof the year, especially since recent economic data has suggested slowing growth in March and early April. Worries about globalweakness have also hung over the market.
"Basic materials companies around the globe were worriedabout potential slowdown in China, and now it looks like thosestocks have risen," Alan Lancz, president of Alan B. Lancz &Associates Inc., an investment advisory firm in Toledo, Ohio.
Thursday's U.S. data supported an upbeat view of theeconomy, however. Initial claims for state unemployment benefitsin the latest week dropped a surprising 16,000 to a seasonallyadjusted 339,000 versus expectations for 351,000.
The Dow Jones industrial average was up 78.16 points,or 0.53 percent, at 14,754.46. The Standard & Poor's 500 Index was up 11.02 points, or 0.70 percent, at 1,589.81. TheNasdaq Composite Index was up 28.70 points, or 0.88percent, at 3,298.35.
United Parcel Service Inc, considered an economicbellwether, advanced 2 percent to $85.14 after the world'slargest package-delivery company reported a quarterly profitabove analysts' estimates.
Akamai Technologies Inc surged 19.1 percent to $43as the best performer on the S&P 500 after the Internet contentdelivery company posted first-quarter earnings above Wall Streetestimates late on Wednesday and also forecast second-quarterresults above analysts' expectations.
But Exxon Mobil Corp and 3M Co bucked the trend as theirshares fell.
Exxon fell 1.1 percent to $88.48. The largest U.S.company by market capitalization said its quarterly profit edgedup, helped by its chemicals business, but oil and gas productionfell.
Fellow Dow component 3M Co lost 2.4 percent to$105.29 after the diversified U.S. manufacturer postedfirst-quarter earnings and revenue that missed Wall Streetexpectations and cut its 2013 profit forecast. (Editing by Bernadette Baum and Kenneth Barry)
