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* Boeing jumps on progress towards China approval of 737 MAX
* U.S. President Biden steps up measures to battle Omicron variant (Updates to market close)
By Stephen Culp
NEW YORK, Dec 2 (Reuters) - A broad rally sent Wall Street to a sharply higher close on Thursday, recovering ground lost over recent sessions as market participants snapped up bargains while digesting the implications of a shifting pandemic.
All three U.S. indexes advanced, with investors favoring value over growth, and economically sensitive smallcaps and transports outperforming the broader market.
Of the three, the Dow gained the most with Boeing Co providing the biggest lift to the blue-chip industrial average.
"We went 29 days in a row in the S&P 500 without a 1% change, up or down, but boom - Omicron hits and five days we’ve had this blast of volatility," said Ryan Detrick, chief market strategist at LPL Financial in Charlotte, North Carolina.
"After the worst two-day drop in more than a year, we’re finally seeing a bit of a bounce," Detrick added. "Buyers are starting to nibble after the recent weakness and pushed stocks higher, but the uncertainty of Omicron is still out there."
As world governments scramble to determine how to respond to the emergent COVID-19 Omicron variant, the United States is set to require private health insurance companies to provide at-home tests, a policy expected to go into effect on Jan. 15.
The Omicron variant has spooked markets for about a week, hitting travel-related stocks particularly hard as a patchwork of new restrictions were enacted around the globe, but those companies were bouncing back in Thursday's session.
The S&P 1500 Airlines and Hotel and Restaurants indexes ended the session sharply higher.
Jobless claims and planned layoffs data provided further evidence that employers are increasingly disinclined to hand out pink slips amid a tight labor market, the result of booming demand colliding with worker scarcity and low labor market participation.
Labor scarcity, combined with stubbornly persistent supply chain constraints, has helped erase the word "transitory" from the Federal Reserve's inflation vocabulary as wages and prices continue to rise, and could very well translate into rate hikes coming sooner and faster than many had hoped.
Market participants now train their gaze on the Labor Department's hotly anticipated November employment report, expected on Friday.
"We're optimistic we’ll have another strong number, suggesting the economy continues to be on very firm footing," Detrick added. "We’re watching wage growth for any hints of potential inflationary worries."
According to preliminary data, the S&P 500 gained 63.46 points, or 1.41%, to end at 4,576.50 points, while the Nasdaq Composite gained 128.78 points, or 0.84%, to 15,382.83. The Dow Jones Industrial Average rose 622.37 points, or 1.83%, to 34,644.41.
All 11 major sectors of the S&P 500 closed in positive territory.
Boeing shares surged after China's aviation authority gave its seal of approval the planemaker's 737 MAX aircraft.
Grocery retailer Kroger Co raised its full-year sales and profit forecasts, sending the stock sharply higher.
Consumer credit companies Visa Inc, Mastercard Inc and American Express Co all posted robust gains. (Reporting by Stephen Culp; additional reporting by Devik Jain and Anisha Sircar in Bengaluru Editing by Marguerita Choy)