The Dow Jones index on Wall Street closed above 16,000 for the first time last night as US stocks rebounded from three days of weakness, after economic data pointed to a slowly improving labour market and subdued inflation.

Financial shares led the market to its first day of gains after three sessions of losses. 

Although investors remain unsure about the timing of the Federal Reserve's scaling back of its $85 billion per month in bond buying, some say the market will weather the eventual pullback in that stimulus.

The Fed has said repeatedly that it will not withdraw support until the economy can stand on its own. 

The Dow Jones industrial average shot up 109 points (0.69%) to close at a record 16,009.99 last night. The Standard & Poor's 500 index gained 14 points (0.8%) to finish at 1,796 and the Nasdaq Composite index climbed 48 points (1.22%) to end at 3,969..

The number of Americans filing new claims for unemployment benefits fell more than expected last week, while producer prices fell for a second month in a row in October, indicating inflation pressures remain muted.