NEW YORK (AP) — Encouraging signs from two of the most important zones of the world economy, the powerhouse of China and the debt-burdened countries of Europe, drove the U.S. stock market Thursday to one of its best days this year.

China's central bank reported a surprising jump in loans in March. That eased concerns about a sudden slowdown in the Chinese economy, which has helped pull the globe out of recession.

Italy easily sold $6.4 billion in government debt. Borrowing rates for Italy fell, European stock indexes reversed earlier declines after the auction, and worries about the continental debt crisis were calmed, at least for the day.

"European governments have a mountain of debt coming due early this year," said John Canally, investment strategist at LPL Financial in Boston. "Some of what you're seeing today in markets is a bit of relief that they're working through it."

In New York, the Dow Jones industrial average was on pace for one of the two or three best days this year. It climbed 171 points and was within sight of passing 13,000 again.

On Wednesday, the U.S. market snapped out of a five-day slump, its longest and deepest of the year. Investors were worried about European debt, slower job growth and the Federal Reserve's resistance to taking further steps to help the economy.

"I think the fear was overdone," said Scott Brown, chief economist at Raymond James. "This is the manic nature of the stock market. The sentiment seems to shift back and forth day by day. Either the economy is booming or it's completely falling apart."

With an hour of trading to go Thursday, the Dow was at 12,977. In other trading, the Standard & Poor's 500 index rose 16 points to 1,385. The Nasdaq composite index gained 35 points to 3,051.

Materials companies led S&P 500 higher, with energy and industrial stocks close behind. Hewlett-Packard rose 6.5 percent, leading the Dow, after a study reported that shipments of personal computers unexpectedly rose by almost 2 percent at the start of the year.

The U.S. trade deficit shrank in February to $46 billion, a four-month low. Exports rose to an all-time high. The shrinking trade deficit raised the possibility that the economy grew faster in the first quarter than previously expected.

U.S. stocks opened higher despite a rise in weekly unemployment claims. The Labor Department reported that applications for unemployment benefits jumped to 380,000 last week, the highest in two months.

To Canally, the stock market's two-day rally looks fragile.

"We're only a few bad earnings reports and a bad government debt auction in Europe from another sharp sell-off," he said.

Among stocks making big moves:

— Avid Technology Inc. plunged 14 percent. The maker of equipment for recording music and video said it expects to post a loss in the first quarter, a result of weaker demand from amateur musicians and DJs.

— McKesson Corp. rose 3.7 percent after reporting that the Department of Veteran Affairs agreed to keep McKesson as its main drug supplier. The VA runs one of the country's largest health care systems.

— Google rose 1.3 percent ahead of its quarterly earnings report, set to be released following the closing bell. In its last report, Google disappointed investors, as it rarely does.