NEW YORK — Investors are getting enthusiastic about stocks again after some reassuring news from the job market.

Stocks rose for a third straight day Thursday on the Labor Department’s report of a larger than expected drop in the number of newly laid-off people seeking unemployment benefits. The Dow Jones industrial average rose 121 points after climbing 275 Wednesday and advancing modestly Tuesday. The 4.7 percent gain in that time is the Dow’s best three-day move since mid-May.

Employment news has been the key driver behind the market’s moves during the past few weeks. Thursday’s news was a welcome change from a string of disappointing jobs reports, including the government’s June employment numbers, that have pounded stocks recently.

The Labor Department said initial claims for jobless benefits fell last week to their lowest levels since early May. Claims fell to 454,000, better than the 465,000 forecast by economists polled by Thomson Reuters.

High unemployment has dragged down consumer confidence, which in turn has slowed spending.

Hank Smith, chief investment officer of equity at Haverford Investments in Radnor, Pa., said some investors have been worried about a so-called “double-dip” in the economy but that more recent data, including Thursday’s jobs report, are a reminder that the recovery is continuing.

“It’s hard to see rolling into a double dip,” he said.

Stocks got some support from a global economic forecast from the International Monetary Fund.

The IMF raised its world growth estimate for the year to 4.6 percent from 4.2 percent. The stock market’s losses since the major indexes reached 2010 highs in late April have been largely due to fears that debt problems in European countries might hurt the recovery around the world.

The market’s advance accelerated in the final hour. Many investors, seeing stocks hold their gains, wanted to be sure they didn’t miss out on the rally, so they began buying before the closing bell.

The Dow rose 120.71, or 1.2 percent, to 10,138.99.