Dow Surges 202 Points on Earnings

NEW YORK (TheStreet) -- The major stock market averages all rallied at least 2% Thursday, led by surging industrial shares after a handful of Dow Jones Industrial Average components reported better-than-expected results and year-end guidance.

The Dow added 202 points, or 2%, to 10,322. The S&P 500 gained 24 points, or 2.3%, to 1094 and the Nasdaq finished ahead by 59 points, or 2.7%, at 2246.

Another pair of Dow components headlined further earnings releases coming in after the closing bell. Microsoft(MSFT) fourth-quarter figures bested both top- and bottom-line estimates as the software manufacturer reported earnings of 51 cents a share on sales of $16.04 billion. Microsoft also noted it has sold 175 million licenses for Windows 7 to date.

Joining Microsoft after the market close, American Express(AXP) said it earned 84 cents a share -- ahead of projections calling for a quarterly profit of 77 cents a share -- while noting in a statement that the company remains "cautious" about the economic landscape.

Jay Suskind, senior vice president at Duncan Williams, said earnings momentum was largely responsible for Thursday's rally.

"Since earnings season began, you haven't had any major disappointments. There have been some slight sales misses, but overall everyone has come in pretty positive. Then today, you have Caterpillar(CAT) and a bunch of other big companies actually guiding higher. That, plus the euro/dollar play, is giving markets a boost," Suskind said. He added, "I think the market is taking a more optimistic look and saying, 'Hey, no one is losing money here.' "

European data also gave global markets a lift on Thursday as the July composite index rose to 56.6 from June's level of 55.6. A reading above 50 indicates expansion.

Overseas on Thursday, Hong Kong's Hang Seng rose 0.5%, and Japan's Nikkei slipped 0.6%. The FTSE in London advanced 1.9%, and the DAX in Frankfurt gained 2.5%.

Investors had kept a keen eye on Washington in the morning as Federal Reserve Chairman Ben Bernanke testified on the semiannual monetary policy report for a second day, this time before the House Committee on Financial Services. The House also passed an extension on unemployment benefits today. The Senate approved the measure by a 59-39 vote on Wednesday.

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