* Yellen to testify before Senate Budget Committee
* Priceline, bounce from early lows
* Indexes up: Dow 0.3 pct, S&P 0.35 pct, Nasdaq 0.7 pct (Updates to open, adds Yellen comments)
By Chuck Mikolajczak
NEW YORK, May 8 U.S. stocks rose on Thursday, as a turnaround in beaten-down momentum names helped boost the Nasdaq while initial jobless claims data pointed to a possible strengthening in the labor market and helped lift the broader market.
Initial claims for state unemployment benefits declined 26,000 to a seasonally adjusted 319,000 for the week ended May 3, snapping three weeks of declines. Economists polled by Reuters had forecast first-time applications for jobless benefits to fall to 325,000 last week.
After falling 1.7 percent over the past two sessions, the Nasdaq rebounded as heavy momentum names bounced off earlier lows. Tesla Motors managed to cut its initial losses for the session in half, down 5.7 percent to $189.87.
The Global X Social Media Index ETF has fallen more than 14 percent since April 22, advanced 2.4 percent.
"It's driven a little bit by the volatility in the big Nasdaq names, notably the momentum stocks, which I guess at least some investors felt maybe made a temporary bottom this morning. When they turned positive it gave some confidence to the overall market," said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.
"These are momentum stocks where the questioning has been of the multiple and it's very subjective as to what people are willing to pay and what they think the future will be."
U.S. Federal Reserve Chair Janet Yellen's testimony as prepared for delivery to the Senate Budget Committee on Thursday was a repeat of the remarks she delivered before a joint House-Senate panel a day earlier.
On Wednesday, Yellen said a slumping housing market and geopolitical tensions risk undermining the U.S. economy and bear close watching by the Federal Reserve in testimony to the Joint Economic Committee.
Shares of Priceline Group Inc were flat at $1133 after it forecast second-quarter results below market estimates, while Tesla Motors Inc offered an outlook for the second quarter on Wednesday that disappointed some investors.
The Dow Jones industrial average rose 49.81 points or 0.3 percent, to 16,568.35, the S&P 500 gained 6.53 points or 0.35 percent, to 1,884.74 and the Nasdaq Composite added 28.317 points or 0.7 percent, to 4,095.99.
Twitter Inc gained 5.8 percent to $32.45 and Yelp Inc advanced 4.4 percent to $55.08 after Morgan Stanley raised its rating on both social media companies. Many of these momentum-driven names have been under pressure recently.
Keurig Green Mountain Inc said on Wednesday it is expanding its partnership with J.M. Smucker Co, agreeing to make and sell Smucker coffee brands, including Folgers, in formats compatible with new Keurig brewing systems. Shares of the K-cup coffee pod maker jumped 14.2 percent as the best performer on both the S&P 500 and Nasdaq 100 indexes. (Editing by Bernadette Baum and Nick Zieminski)