By Joe Wallace and Xie Yu

Political unrest in Washington didn't dent the stock market's ongoing rally Thursday, with U.S. stocks climbing toward fresh records.

Financial and technology stocks led Thursday's gains, pushing the S&P 500 up nearly 1% and putting the broad index on pace to close at its first record of 2021. The Dow Jones Industrial Average also rose, adding 121 points to 30901, while the Nasdaq Composite jumped 1.5%, putting both of those benchmarks on track for record closes as well.

Analysts say investors are largely looking past Wednesday's violent clash between pro- Trump protesters and law enforcement in the Capitol building that left four people dead, instead focusing on what the shift of political power from Republicans to Democrats means for the market.

"It's not going to affect the transition of power, and as long as that is the case, I think investors will ignore it," said Edward Smith, head of asset allocation research at U.K. investment firm Rathbone Brothers.

Democrats will now control the Senate after winning two seats in Georgia's special election, raising the prospect of additional stimulus for the U.S. economy after President-elect Joe Biden takes office.

A joint session of Congress early Thursday morning also affirmed Mr. Biden's defeat of President Trump, who committed to an orderly transition of power.

"The expectation is now we've avoided a gridlock, and more fiscal support will be available to the economy through this coming year, rather than less," said Christopher Smart, chief global strategist at Barings.

Investors are also tracking a flurry of data releases for fresh insight into the U.S. economy's fitful recovery. Jobless claims were nearly steady last week, slipping to 787,000 from a revised 790,000 the prior week as an extra $300 in benefits kicked in for laid-off workers.

The Institute for Supply Management's gauge of services-sector activity, due at 10 a.m., will likely show it fell slightly, but remained in growth territory in December.

On Thursday, tech stocks in the S&P 500 rose 1.5%, clawing back some of their losses from earlier in the week. The sector remains down 1.5% over the last four trading sessions. Financial stocks, meanwhile, soared 1.7%, led by a 3.7% jump in shares of JPMorgan Chase following an analyst's upgrade.

Other individual movers include DXC Technology, which rose 9.4%, after Reuters reported that France's Atos had made a takeover approach of more than $10 billion for the firm. Walgreens Boots Alliance rose 3% after reporting an increase in sales in its latest quarter.

A selloff in U.S. Treasurys extended, with the yield on the 10-year note ticking up to 1.072%, from 1.041% Wednesday. Bond yields rise as prices fall. The 10-year yield climbed past 1% for the first time since March on Wednesday, on bets for increased U.S. stimulus.

The WSJ Dollar Index, which tracks the greenback against a basket of currencies, climbed 0.4%, recovering some lost ground after falling to its lowest level since April 2018.

"At the end of the day, the confidence in the institutions is still there," said George Efstathopoulos, multiasset fund manager at Fidelity International.

Overseas markets broadly advanced. The regionwide Stoxx Europe 600 index edged up 0.5%, led higher by shares of construction and materials companies.

In China, the Shanghai Composite Index added 0.7% to close at its highest in more than five years. South Korea's Kospi rose 2.1% to a fresh record high.

Hong Kong's Hang Seng slipped 0.5%, however. Shares of China's big three telecommunications operators, listed in Hong Kong, tumbled after the New York Stock Exchange reversed course for the second time in days and said it would proceed with a planned delisting. China Mobile, China Unicom and China Telecom dropped between 7% and 11%.

Also weighing on the Hong Kong market, shares in Alibaba Group lost 3.9% and Tencent fell 4.7%. The losses came after The Wall Street Journal reported that U.S. officials are considering prohibiting Americans from investing in the two technology giants.

"Overall, the markets are looking at the positives," said Ken Wong, a portfolio manager at Eastspring Investments. He said investors were looking beyond the unrest in Washington, as well as other issues such as the potential tax implications of Democratic control of Congress.

-- Michael Wursthorn contributed to this article.

Write to Joe Wallace at Joe.Wallace@wsj.com and Xie Yu at Yu.Xie@wsj.com

(END) Dow Jones Newswires

01-07-21 1017ET