US STOCKS-Nasdaq tracks yearly gains on PayPal boost

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* PayPal jumps on strong payments recovery forecast
* Lyft surges on revenue beat, cost cuts
* Energy cos gain on oil demand hopes
* Indexes jump: Dow 1.56%, S&P 1.74%, Nasdaq 1.74%

(Updates to early afternoon)
By C Nivedita and Medha Singh
May 7 (Reuters) - A jump for PayPal on Thursday put the
Nasdaq on course to turn positive on the year, with Wall Street
also boosted by hopes of a faster economic recovery following a
surprise rise in Chinese exports.
Payments processor PayPal PYPL.O surged 12.8% to a record
high after it forecast a strong rebound in payments volumes in
the second quarter as social distancing drives more people to
shop online. Gains for Apple Inc AAPL.O , Alphabet Inc GOOG.O and
Microsoft Corp MSFT.O also lifted the Nasdaq to levels last
seen in early March.
At 1:09 p.m. ET, the tech-heavy index .IXIC was up 1.74%
and set for gains of about 0.4% since the start of the year,
powered by historic stimulus and, more recently, by hard-hit
states reopening businesses following COVID-19 lockdowns.
Lyft Inc LYFT.O surged 27.7% as the ride-hailing company
posted higher-than-expected revenue and vowed to further cut
costs to be profitable. Rival Uber Technologies UBER.N , which
is expected to report results after markets close, gained 12.3%.
"With expectations just set so low, any positive news is
really being welcomed, and the continuing negative news, to some
extent, is being pushed to the side," said Rick Meckler a
partner at Cherry Lane Investments in New Vernon, New Jersey.
Wall Street's fear gauge .VIX eased to levels it was
trading at in early March, before volatility leapt to 12-year
highs due to the COVID-19 pandemic. However, the S&P 500 is
still about 15% below its Feb. record high.
Latest data showed 3.17 million Americans applied for state
unemployment benefits last week, but the number marked the fifth
straight weekly decline in claims. The Labor Department's
monthly nonfarm payroll report is due on Friday.
"The bad news is now looking in the rear-view mirror," said
Thomas Hayes, managing member at Great Hill Capital Llc in New
York.
"Markets are sniffing out that people are getting back to
work, demand is going to recover, and all this extra stimulus is
going to lead to growth levels maybe much higher-than-expected."
Energy stocks .SPNY rose 3.3%, the most among the 11 major
sectors, on optimism around future oil demand after China's
overseas shipments in April rose for the first time this year as
factories raced to make up for lost sales. The Dow Jones Industrial Average .DJI was up 369.59
points, or 1.56%, at 24,034.23, the S&P 500 .SPX was up 49.57
points, or 1.74%, at 2,897.99.
Shares of Fortinet Inc FTNT.O jumped 20.4% after the
cybersecurity firm forecast current-quarter revenue largely
above expectations.
Advancing issues outnumbered decliners by a 4.57-to-1 ratio
on the NYSE by a 3.11-to-1 ratio on the Nasdaq.
The S&P index recorded eight new 52-week highs and no new
lows, while the Nasdaq recorded 51 new highs and six new lows.