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Stock Market Today: Stocks Surge as Caterpillar, 3M Earnings Provide a Boost

NEW YORK (TheStreet) -- Stocks surged Thursday amid strong third-quarter earnings from Caterpillar (CAT) and General Motors (GM) , and an unexpected rise in manufacturing activity in China and the eurozone.

The S&P 500 rose more than 1.4% to 1,955.00, with the Nasdaq and Dow Jones Industrial Average posting gains of 1.68% and 1.49%, respectively.

Must Read: Warren Buffett's Top 10 Dividend Stocks

Initial jobless claims rose 17,000 last week to 283,000, slightly exceeding forecasts. Nonetheless, claims reflect significant improvement in the U.S. labor market. The four-week average on claims now stands at its lowest level since mid-2000, reinforcing data from the Bureau of Labor Statistics that showed the U.S. unemployment fell to a six-year low below 6% in September.

Flash MarkIt U.S. Manufacturing PMI fell more than expected to 56.2, below estimates of 57.0, according to the median forecast compiled by Bloomberg. The reading was also the lowest in nine months. That data, however, had little impact on early stock market gains on Thursday.

West Texas Intermediate Crude was trading 1.48% higher at $81.71, while ICE Brent Crude was trading 1.79% higher at $86.23. Oil tumbled on Wednesday afternoon, pushing stock markets lower for the day, after the Energy Information Administration reported a greater-than-forecast in inventories.

In corporate earnings, Caterpillar surged over 5% in early trading after the company said it earned $1.72 a share in the third quarter, sharply exceeding estimates of $1.36 a share. The industrial equipment manufacturer, which counts on international markets for more than half of its sales, also increased its profit forecasts for coming quarters.

Materials giant 3M (MMM) was leading the Dow higher after also beating third-quarter earnings estimates.

Earnings from General Motors also gave a positive read on the economy. Earnings from the automaker were bolstered by stronger-than-forecast U.S. sales. Car sales in North America rose more than 7% in the quarter, indicating continued consumer confidence in the automaker and strength in U.S. economic demand.

Overall, GM reported third-quarter earnings of 97 cents a share on $39.3 billion in revenue. Shares in GM were rising more than 1% to $31.65 in early trading.

Airline stocks were also rising after Southwest (LUV) and JetBLue (JBLU) reported third-quarter profit that showed rising earnings in the industry after years of consolidation. UnitedContinental (UAL)  fell 1%, erasing sharp losses in early trading.

Comcast (CMCSA) and Under Armour (UA) beat third-quarter earnings, while agriculture giant Potash (POT) increased its guidance. Homebuilder PulteGroup (PHM) reported in-line third-quarter earnings and pharmaceuticals Celgene (CELG) and Eli Lilly (LLY) reported mixed results.

Comcast was rising over 3% while Under Armour reversed early losses.

On Wednesday evening, HSBC said monthly Chinese manufacturing PMI rose to 50.4, exceeding forecasts of 50.2, according to Bloomberg data, giving new insight on the country's growth prospects. Earlier this week, the Chinese statistics bureau said gross domestic product rose 7.3% in the July-September quarter.

In Europe, manufacturing PMI rose to 50.7, sharply exceeding forecasts of a drop to 49.9, possibly indicating that Eurozone economic activity is stronger than some had feared.

A reading below 50 signals economic contraction. German manufacturing PMI also reflected rising economic activity. U.S. manufacturing PMI will be released at 9:45 a.m. EDT, with economists forecasting a slight drop to 57.

Telecom giant AT&T (T) reported in-line third-quarter earnings of 63 cents a share on revenue of $33 billion, but the company's guidance underwhelmed investors. Amazon (AMZN) will report earnings after the market close.

Must Read: Warren Buffett's Top 10 Dividend Stocks

-- Written by Antoine Gara in New York

Follow @AntoineGara

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