Stocks climbed higher yesterday following a late rally fuelled by a surprising drop in the nation's jobless rate and a soothing financial outlook by auto giant General Motors.

The blue-chip Dow Jones industrial average jumped 78.47 points, or 0.72 per cent, to end at 10,990.41, while the tech-loaded Nasdaq composite index index gained 38.95 points, or 1.85 per cent, to end at 2,149.44, based on the latest data.

The benchmark Standard & Poor's 500 index added 4.85 points, or 0.39 per cent, at 1,260.67.

The US Labor Department reported that the jobless rate fell to 4.4 per cent in May from 4.5 per cent in April, showing the jobs market has held up better than expected. Economists had predicted an uptick. The last time the jobless rate fell was in September 2000.