Caterpillar jumped after its third-quarter earnings report was better than Wall Street analysts had been expecting. The company also raised its profit outlook for the year. 3M, the maker of Post-it notes, industrial coatings and ceramics, was among other companies that gained after releasing impressive third-quarter results.
Investors were also cheered by a report that showed the number of people applying for U.S. unemployment benefits remains at a historically low level, suggesting that hiring is gaining steam. In Europe, a survey of businesses eased concerns that the region may be slipping back into recession.
Solid company earnings are sending the stock market higher and helping it recover from a jarring drop in mid-October that gave the Standard & Poor’s 500 index its biggest slump in two years. The index has gained on five of the last six days, and on Tuesday logged its biggest advance of the year.
The Standard & Poor’s 500 index rose 23.71 points, or 1.2 percent, to 1,950.82. The Dow Jones industrial average climbed 216.58 points, or 1.3 percent, to 16,677.90. The Nasdaq composite rose 69.95 points, or 1.6 percent, to 4,452.79.
Eight of the 10 sectors in the S&P 500 gained, led by a surge in industrial companies after Caterpillar and 3M reported their earnings.
Caterpillar said that some belt tightening had helped it contend with a slowing global economy. The company’s CEO said he was hopeful that economic growth would pick up next year. Caterpillar’s stock rose $4.70, or 5 percent, to $99.27. 3M gained $6.10, or 4.4 percent, to $145.05.
Companies in the S&P 500 have reported earnings growth of 5.5 percent for the third quarter, according to analysts at S&P Capital IQ. The rate of growth has slowed from 10.4 percent in the second quarter, but is forecast to pick up in the final three months of the year.
European markets closed higher. France’s CAC-40 rose 1.3 percent. Germany’s DAX gained 1.2 percent and Britain’s FTSE 100 edged up 0.3 percent.
In energy trading, the price of oil rose sharply Thursday on reports of lower production in Saudi Arabia and signs of strength in the U.S. economy.
The price of oil rose sharply on reports of lower production in Saudi Arabia and signs of strength in the U.S. economy. Benchmark U.S. crude rose $1.57 to close at $82.09 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many U.S. refineries, rose $2.12 to close at $86.83 on the ICE Futures exchange in London.
In other energy futures trading on the NYMEX, wholesale gasoline rose 5.1 cents to close at $2.207 a gallon, heating oil rose 2.6 cents to close at $2.499 a gallon natural gas fell 3.7 cents to close at $3.622 per 1,000 cubic feet.
In currency trading, the dollar was little changed against the euro, trading at $1.2651. The dollar climbed to 108.16 yen. U.S. government bond prices fell. The yield on the 10-year Treasury note rose to 2.28 percent from 2.22 on Wednesday.
In metals trading, gold fell $16.40 to $1,229.10 an ounce, silver fell seven cents to $17.16 an ounce and copper rose two cents to $3.04 a pound.