U.S. stocks extended gains on Thursday as investors pondered over the newly-released inflation data.

The Dow Jones Industrial Average rose 196.99 points, or 0.80 percent, to 24,739.53. The S&P 500 increased 25.28 points, or 0.94 percent, to 2,723.07. The Nasdaq Composite Index was up 65.07 points, or 0.89 percent, to 7,404.97.

The consumer price index (CPI) for all urban consumers increased 0.2 percent in April on a seasonally adjusted basis, missing the market consensus of 0.3 percent, the U.S. Labor Department reported Thursday. Over the last 12 months, the all-items index rose 2.5 percent before seasonal adjustment.

The index for all items less food and energy increased 0.1 percent in April, below market estimates of a 0.2-percent gain.

"There's even more good news in this report than suggested by the surprise relief in the core. Goods prices are falling outright and there are declines throughout services," said Chris Low, chief economist at FTN Financial, in a note.

"The FOMC (Federal Open Market Committee) wants core inflation to run above 2 percent for a year or two to prove to the world 2 percent is a target, not a ceiling. Today's CPI report suggests it may not be as easy as they thought," he added.

In a separate report, the department announced that in the week ending May 5, the advance figure for seasonally adjusted initial claims was 211,000, unchanged from the previous week's unrevised level.

The four-week moving average was 216,000, a decrease of 5,500 from the previous week's unrevised average of 221,500. This is the lowest level for this average since Dec. 20, 1969, when it was 214,500.

In corporate news, shares of AMC Entertainment jumped 2.49 percent to 16.45 U.S. dollars apiece after the company delivered quarterly profit and revenue that were well above forecasts.