U.S. stock indexes closed higher in the holiday-shortened trading week, with the $S&P 500 index(.SPX.US)$ notching a new high, as investors digested economic data and developments related to the Omicron variant's spread.

The S&P 500 was up 0.6%, or 29.23 points, to 4725.79, its 68th record close in 2021. Thursday's rise, its third consecutive daily increase, followed a Wednesday session during which strong economic data helped ease investors' concerns about the risks posed by Covid-19 and inflation. The tech-focused $Nasdaq Composite Index(.IXIC.US)$ rose 0.85%, or 131.48 points, to 15653.37. The $Dow Jones Industrial Average(.DJI.US)$ added 0.55%, or 196.67 points, to 35950.56.

Fresh data from the Commerce Department showed that U.S. consumer-spending growth cooled last month. The U.S. personal-consumption expenditures price index excluding food and energy, a gauge of inflation, in November rose 4.7% from one year earlier. First-time applications for unemployment benefits, a proxy for layoffs, held steady at 205,000 in the week ended Dec. 18, unchanged from one week earlier.

This week's gains in the market suggest investors remain focused on the pandemic's trajectory, said Greg Bassuk, chief executive of AXS Investments, an asset-management firm for alternative investments. Developments in Covid-19 treatments and vaccines seem to be contributing to expectations for an economic recovery in 2022 despite the spread of the Omicron variant, Mr. Bassuk added.

"We believe Covid is still the investor narrative," Mr. Bassuk said.

U.S. regulators cleared use of a Covid-19 pill from Merck and partner Ridgeback Biotherapeutics LP, the latest easy-to-use therapy that infected people can take to keep out of the hospital. Merck shares fell 0.6%. Novavax said its two-dose Covid-19 vaccine demonstrated "strong immune responses" against Omicron and other variants. Its shares closed down 3.3%.

Higher inflation and low yields on government bonds have dissuaded some investors from holding them this year, due to diminished returns on keeping them to maturity. The yield on the benchmark 10-year Treasury note ticked up to 1.492% Thursday from 1.457% Wednesday. Yields rise when prices fall.

Strong inflation data helped prompt the Federal Reserve earlier this month to accelerate a winding down of its pandemic-era stimulus. Investors and central bankers are worried that the Omicron variant could add additional pressure to inflation.

"Inflation is center stage for a lot of people," said Andrew Cole, head of multiasset in London at Pictet Asset Management. "Inflation is widely expected to peak, if not in the first quarter, the first half of next year. You might have to wait until the second half of next year for central banks to relax."

AXS Investments' Mr. Bassuk said Thursday's gains in travel and hospitality stocks reflect investors' optimism for the containment of the pandemic. Shares of hotel chain $Marriott International(MAR.US)$ gained 1.6% and United Airlines Holdings rose 0.7%.

Investors seem to be positioning themselves for a rebound in global travel next year, depending on developments with Covid-19 case rates and policy changes, said Paul Baiocchi, chief exchange-traded fund strategist at SS&C ALPS Advisors.

"There is an opportunity for increased travel spending," said Mr. Baiocchi, who expects a rotation into value from growth stocks next year.

Overseas, the Stoxx Europe 600 rose 1%. Major stock indexes in Asia closed higher, with China's Shanghai Composite gaining 0.6% and South Korea's Kospi up 0.5%. Japan's Nikkei 225 added 0.8%.

Shares of $JD.com(JD.US)$ fell 7% in Hong Kong trading after Chinese social-media giant Tencent Holdings said it was shedding most of its stake in the online retailer. Shares of Tencent rose 4.2%. Hong Kong's broader Hang Seng Index gained 0.4%.