A latest bunch of positive economic data sparked a rally on Wall Street on Thursday, pushing major indexes to fresh multi-year closing highs.

The Dow Jones industrial average gained 123.13 points, or 0.96 percent, to 12,904.08, only about 100 points away from the 13,000 key mark.

The Standard & Poor's 500 rose 14.81 points, or 1.10 percent, to 1,358.04, and the Nasdaq Composite Index rallied 44.02 points, or 1.51 percent, to 2,959.85, a new 12 year closing high.

Thursday' s data continued to show the U.S. economic recovery was picking up.

The Labor Department said that the number of people applying for jobless benefits dropped 13,000 to a seasonally adjusted 348,000 last week, the lowest level in almost four years.

The four-week moving average of new jobless claims declined 1, 750 to 365,250. The average has remained below the 400,000 mark since November, a positive sign of improvement for the sluggish jobs market.

Meanwhile, the Commerce Department reported housing starts jumped 1.5 percent to an annual rate of 699,000 units last month, beating previous expectations.

A closely followed index of manufacturing activity in the Philadelphia area reached a four-month high in February in further evidence of the continued strength in the manufacturing sector.

According to the Federal Reserve Bank of Philadelphia, its manufacturing index climbed to 10.2 in February from 7.3 in January to reach the highest level since October.

Investors were also heartened by some reports that the European central bank had agreed to swap Greek bonds for new bonds, spurring hopes that a complete Greek bond swap deal could be reached in the near term.

Now, Greece is scrambling to get the 130-billion- euro bailout at the Monday meeting of euro zone finance ministers to avert a chaotic default when 14.5 billion euros in debt repayments fall due on March 20.

Among stocks in focus, General Motors surged about 9 percent after the company reported a record 7.6-billion-dollar profit last year, two years after it nearly collapsed.

In other markets, the U.S. dollar fell against major currencies in late New York trading and oil prices rose on hopes for a Greek debt deal.

Light, sweet crude for March delivery gained 51 cents, or 0.50 percent to settle at 102.31 dollars a barrel on the New York Mercantile Exchange.