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Stock Market Today: Earnings, Leading Indicators Signal U.S. Strength

Stocks in this article: GMCATAMZN^GSPC^IXICPOTPHMLUVJBLUUAL

NEW YORK (TheStreet) -- After a bout of market volatility at the beginning of October created fears of a U.S. slowdown, corporate earnings and leading economic indicators were pointing to steady growth.

Jobless claims released Thursday remained near decade lows and economic bellwethers like 3M (MMM) , Caterpillar (CAT) , General Motors (GM) and the airline industry reflected strong business and consumer demand in the U.S.

Those earnings reports, taken with an unexpected rise in manufacturing data in China and Europe, propelled stock markets sharply higher on Thursday. 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.

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.

Shares of Caterpillar surged more than 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.

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 afternoon 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 more 3% while Under Armour reversed early losses.

Amazon.com (AMZN) will report earnings after the markets close on Thursday, with analysts expecting the e-commerce giant to report an adjusted loss of 3 cents a share on sales of $20.84 billion. The company may also provide commentary on its expectations for the holiday season, potentially impacting stock prices across the retail industry.

A report from Bloomberg pushed oil markets higher in midday trading after an unnamed source told the news agency Saudi Arabian oil supplies dropped 328,000 barrels a day in September. Oil rose from two-year lows on the report.

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.

HSBC said Wednesday evening that 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.

Friday will be another busy day of corporate earnings and economic data.

The U.K. will report third-quarter gross domestic product figures, potentially shedding light on any prospective interest rate increases from the Bank of England. Growth in the U.K. is expected to have risen 3% on an annualized basis in the third quarter.

In the U.S., the National Association of Realtors will release new home sales figures for September on Friday morning. New home sames are expected to be 470,000, a slight drop from August’s reading of 504,000.

Must Read: Warren Buffett's Top 10 Dividend Stocks

-- Written by Antoine Gara in New York

Follow @AntoineGara

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