CORRECTED - US STOCKS-Wall St rises on earnings, drop in jobless claims

(Corrects paragraph 7 to remove extra word "to" before "a surprising 16,000" to read "dropped a surprising 16,000") 爀尮慰

By Caroline Valetkevitch

NEW YORK (Reuters) - U.S. stocks rose on Thursday, boosted by gains in shares of materials companies, including iron ore producer Cliffs Natural Resources Inc , and by a drop in weekly jobless claims.

Cliffs jumped 20.6 percent to $21.97 after it posted earnings late on Wednesday that were much better than analysts had estimated. The S&P 500 materials index was up 1.4 percent.

Telecommuncations companies also rose following gains in Verizon Communications Inc . The stock rose 2.1 percent to $52.87 after sources told Reuters it has hired advisers to prepare a possible $100 billion cash and stock bid to take full control of Verizon Wireless from joint venture partner, Vodafone Group Plc .

Companies reporting results in the past 24 hours lifted the growth forecast for S&P 500 companies quarterly earnings to 3.6 percent. At the start of the reporting period the forecast was growth of just 1.5 percent.

Investors have closely watched earnings to see if they would be enough to extend the market's uptrend that began at the start of the year, especially since recent economic data has suggested slowing growth in March and early April. Worries about global weakness have also hung over the market.

"Basic materials companies around the globe were worried about potential slowdown in China, and now it looks like those stocks 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 the economy, however. Initial claims for state unemployment benefits in the latest week dropped a surprising 16,000 to a seasonally adjusted 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. The Nasdaq Composite Index was up 28.70 points, or 0.88 percent, at 3,298.35.

United Parcel Service Inc , considered an economic bellwether, advanced 2 percent to $85.14 after the world's largest package-delivery company reported a quarterly profit above analysts' estimates.

Akamai Technologies Inc surged 19.1 percent to $43 as the best performer on the S&P 500 after the Internet content delivery company posted first-quarter earnings above Wall Street estimates late on Wednesday and also forecast second-quarter results above analysts' expectations.

But Exxon Mobil Corp and 3M Co bucked the trend as their shares fell.

Exxon fell 1.1 percent to $88.48. The largest U.S. company by market capitalization said its quarterly profit edged up, helped by its chemicals business, but oil and gas production fell.

Fellow Dow component 3M Co lost 2.4 percent to $105.29 after the diversified U.S. manufacturer posted first-quarter earnings and revenue that missed Wall Street expectations and cut its 2013 profit forecast.

(Editing by Bernadette Baum and Kenneth Barry)