NEW YORK, Oct 23 (Reuters) - U.S. stocks jumped 1 percent on Thursday as a number of strong results, including from a pair of Dow components, reassured investors that corporations continued to fare well despite concerns about global economic growth.
Shares of both Caterpillar Inc and 3M Co rose following their results, with heavy machinery maker Caterpillar also raising its full-year profit view. Caterpillar was up 4.2 percent at $98.31 while 3M added 4.3 percent to $144.95.
As both are big multinationals, the results were especially encouraging, given concerns about how recent U.S. dollar strength could impact profit growth.
“It’s good to see good numbers in any company, but if we’re looking at headwinds like currency and slowing global growth, seeing multinationals like Caterpillar and 3M post solid beats gives us confidence that economic growth is holding on and probably better than the market is currently expecting,” said Phil Orlando, chief equity market strategist, at Federated Investors, in New York.
Equities have been strong of late, with the S&P 500 posting a gain of 0.9 percent or more in four of the past five sessions.
Thursday’s sharp rebound from Wednesday’s drop was the latest example of a decline being used as a buying opportunity. At current levels, the S&P is 3.2 percent from its record close, and it has not undergone a correction - defined as a 10 percent decline from a peak - since 2012.
On the downside, AT&T Inc fell 2.5 percent to $33.64 a day after the telecom giant reported weaker-than-expected revenue growth and cut its full-year forecast for consolidated revenue growth.
Yelp Inc slumped 15 percent to $59.80 on heavy volume a day after giving a revenue outlook that was below expectations. The outlook prompted many analysts to cut their price targets on the stock.
Despite some disappointments, this season has largely been a positive one for companies. With 27 percent of the S&P 500 having reported, 68.9 percent have exceeded profit expectations, according to Thomson Reuters data, above the long-term average of 63 percent.
Jobless claims rose by 17,000 in the latest week, in line with expectations, while the underlying trend remained consistent with a firming labor market.
At 9:42 a.m., the Dow Jones industrial average rose 202.35 points, or 1.23 percent, to 16,663.67, the S&P 500 gained 19.93 points, or 1.03 percent, to 1,947.04 and the Nasdaq Composite added 46.75 points, or 1.07 percent, to 4,429.60.
Advancing issues outnumbered declining ones on the NYSE by 2,426 to 351, for a 6.91-to-1 ratio; on the Nasdaq, 1,805 issues rose and 426 fell for a 4.24-to-1 ratio.
The benchmark S&P 500 index was posting 25 new 52-week highs and 2 new lows; the Nasdaq Composite was recording 24 new highs and 11 new lows. (Editing by Bernadette Baum)