Caterpillar jumped after its third-quarter earnings report was better than Wall Street analysts had expected. The company also raised its profit outlook for the year. And 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 encouraged by a report that showed the number of people applying for unemployment benefits remaining at a historically low level, suggesting that hiring was gaining steam. In Europe, a survey of businesses eased concerns that the region might 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-stock index its biggest slump in two years. The index has gained on five of the last six days, and on Tuesday it logged its biggest advance of the year.
“The economic backdrop here in the United States is continuing to look strong,” said Karyn Cavanaugh, a senior market strategist at Voya Investment Management.
The S.&P. 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 index 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’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.
Wall Street started the day higher, after gains in European markets, after a survey of the manufacturing and services sectors eased some fears that the region could be falling back into recession.
Markit, the financial information company, 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.
Although the reports from Europe “weren’t fantastic,” they suggested that the region would avoid a return to recession, said David Lebovitz, a global market strategist at J. P. Morgan Funds. Concerns about the worsening growth outlook in Europe helped push stocks sharply lower last week.
In the bond market, interest rates moved higher. The yield on the 10-year Treasury note rose to 2.28 percent, from 2.22 percent late Wednesday, while its price fell 16/32, to 100 28/32