Strong earnings lead to strong market

NEW YORK - A combination of strong company earnings and encouraging economic reports, both in the United States and Europe, gave the stock market another day of solid gains Thursday.

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. The maker of Post-it notes, 3M, was among other companies that gained after releasing impressive third-quarter results.

Caterpillar's stock rose $4.70, or 5 percent, to $99.27. For its part, 3M gained $6.10, or 4.4 percent, to $145.05.

Investors were also cheered by a report that showed the number of people applying for 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.

The Standard & Poor's 500 index rose 23.71 points, or 1.23 percent, to 1,950.82. The Dow Jones industrial average climbed 216.58 points, or 1.32 percent, to 16,677.90. The Nasdaq composite rose 69.95 points, or 1.60 percent, to 4,452.79.

Stocks had started the day higher, following gains in European indexes, after a survey of the manufacturing and services sectors eased some fears that the region could be falling back into recession.

Financial information company Markit said its composite purchasing managers index for the 18-country bloc, a broad gauge of business activity, rose to 52.2 in October from 52 in September. Analysts had expected a small decline. Readings above 50 suggest expansion.

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.