By Saumya Vaishampayan And Dan Strumpf 

U.S. stocks advanced Thursday, as European equities regained ground and bond markets stabilized.

The Dow Jones Industrial Average gained 141 points, or 0.8%, to 18201 in early trading. The S&P 500 gained 13 points, or 0.6%, to 2111. The Nasdaq Composite Index gained 31 points, or 0.6%, to 5013.

Other markets that had seen sharp losses in recent sessions also regained ground. European stocks extended their gains as U.S. trading got under way, with Germany's DAX snapping a three-day losing streak to gain 1%.

Government bonds in the both the U.S. and Europe also rose. The yield on the 10-year Treasury note fell to 2.245% from 2.283%, as prices rose.

"It seems like some of the reversals that we've seen--oil rising, rates moving up--are a bit more stable so far this morning, and that's helping" support markets, said Michael Arone, State Street Global Advisors' chief investment strategist.

Crude-oil futures slipped 0.4% to $60.27 a barrel, after rising 39% in the last two months.

Most stocks fell marginally Wednesday. The Dow slipped less than 0.1% to 18060.49 and the S&P lost 0.64 point to 2098.48.

Government bonds in the U.S. and Europe have sold off sharply in recent sessions, leading to uneven trading in U.S. stocks in recent sessions. The rout marked a turnaround from earlier this year when the European Central Bank's bond-buying program helped boost European bond prices to record highs.

With Thursday's rally, the S&P 500 is up 1.1% in May, while the Dow has advanced 1.9%.

In economic news, jobless claims fell by 1,000 to 264,000 in the week ended May 9, the Labor Department said. Economists surveyed by The Wall Street Journal had expected 273,000 new claims.

Separately, the producer-price index for final demand fell 0.4% in April from March, the Labor Department said. When excluding the volatile food and energy categories, core prices fell 0.2%. Economists had expected both overall and core prices would increase 0.1%.

In other markets, gold futures slipped 0.2% to $1216.20 an ounce.

The euro gained 0.4% to $1.1394, earlier rising above the $1.14 level for the first time since late February.

In corporate news, Cisco Systems Inc. said net income in its fiscal third quarter rose 12% on revenue that increased 5.1%. Shares gained 0.7%.

Shares of DuPont gained 1.6%, rebounding from a loss of 7.4% on Wednesday.

Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com and Dan Strumpf at daniel.strumpf@wsj.com

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