Updated from 4:08 p.m. EDT

U.S. stocks finished a wobbly Thursday with an upward thrust. The day was marked by a flood of corporate earnings statements, evidence of additional turmoil in the financial sector and a fresh serving of economic data.

The Dow Jones Industrial Average, which swung some 815 points during the session, ended the day up 401.35 points, or 4.7%, at 8979.26. The S&P 500 finished up 38.59 points, or 4.3%, at 946.43, and the Nasdaq climbed 89.38 points, or 5.5%, to 1717.71.

Volatility soared during the session, as the CBOE Volatility Index reached 80, a level not seen in its 18 years. After rising 17% to 81 earlier, the index, used as a measure of fear in the market, finished up 3.2% at 71. The Dow swung wildly, down 380 points at its lows and reaching a high with gains of 431 points.

Ahead of Wednesday's trading, Swiss bank UBS ( UBS) received a $5.3 billion cash injection from the Swiss government in exchange for a 9% equity position in the company. UBS and the Swiss National Bank also reached an agreement for UBS to transfer up to $60 billion of currently illiquid securities and other assets from its balance sheet to a separate fund. UBS shares finished up 4% at $17.33.

There was trouble back in the U.S. as well. Bloomberg reported that Citadel Investment Group's largest hedge fund lost as much as 30% this year on bad bets in convertible bonds, stocks and corporate debt. Citadel quickly denied the rumors but said that its performance was hindered by the challenging market.

Art Hogan, chief market strategist at Jefferies, said he believes the market bottomed at its intraday low on Friday, and the markets will not even return to test that. "We're still convinced that the punishment is not fitting the crime and we're overdoing it here." He said the market is seeing indiscriminate selling as firms continue to try to raise cash.

Bob Andres, chief investment strategist for Portfolio Management Consultants, was less bullish, saying, "The consumer is a dead man walking." He said the Federal Reserve and Treasury have gotten behind the curve. Now that the government has somewhat addressed the credit crisis, it's time to move on and look at the economy, he said.

"Everybody is relating the bailout package in some way to the economy ... and it has almost nothing to do with the economy," said Andres. As for equities, "You can't call a bottom or a top," he said. "Are we closer to fair value? Certainly we are." However, he said he predicts GDP will decline 2.5% this quarter and the economy will remain stagnant for a long time.

Corporate earnings were once again in focus. Following the close Wednesday, online auctioneer eBay ( EBAY) swung to a third-quarter profit but said its core business may face difficulties ahead. Shares slipped 2.4% to $14.97.

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Quarterly results from financial firms continued to reflect the impact of the credit crunch. Citigroup ( C) reported a third-quarter loss that was narrower than the Street had forecast. Citi dropped 2% to $15.90.

Merrill Lynch ( MER), meanwhile, posted a widened loss that included a $2.5 billion payment related to a stock offering and a $425 million expense tied to settlement of a government approval of its dealings in auction-rate securities. Shares ticked up 0.6% to $18.35.

Bank of New York Mellon ( BK) and BB&T ( BBT) announced declines in profit of 53% and 19%, respectively. Bank of New York Mellon added 6.3% to $31.08, and BB&T added 3.4% to $33.26.

Beyond the financials, Nokia ( NOK) reported declining profit but forecast growth going forward. Shares climbed 9.7% to $16.57.

Continental Airlines ( CAL) said it lost money for the quarter, in part because of high fuel costs. Shares jumped 22% to $15.68. Southwest ( LUV) registered its first quarterly loss in 17 years as it wrote down its fuel cost-hedging portfolio. Its stock rose 8% to $12.49.

Coal company Peabody Energy ( BTU) reported a 59% increase in third-quarter earnings on rising revenue. Shares rocketed 18% to $28.68.

Hogan of Jefferies said he foresees better-than-expected earnings statements for this quarter but lackluster forward guidance. He predicted that during the first half of next year, the market will begin to price in a broad economic recovery to be staged in the third and fourth quarters of 2009.

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In technology, Microsoft ( MSFT) CEO Steve Ballmer said that an acquisition of Internet portal Yahoo! ( YHOO) would make economic sense. Yahoo! had earlier turned down a buyout offer from Microsoft for $33 a share. Microsoft added 6.8% to $24.19, and Yahoo! added 11% to $12.99.

On the industrials side, a report from the Detroit News said that General Motors ( GM) would lay off 1,500 workers at assembly plants in Michigan and Delaware. Shares added 2.9% to $6.40.

Shifting to economic data, the Department of Labor's September consumer price index showed that prices were unchanged for the month, better than the 0.1% increase expected by economists. The core rate of price increases came in at 0.1%, below a 0.2% increase in August.

The Department of Labor also reported that, for the week ended Oct. 11, jobless claims declined by 16,000 to 461,000, below a consensus estimate of 470,000 and down from 477,000 the previous week.

Industrial production numbers from the Federal Reserve showed a 2.8% decline in production, the largest decline since December 1974. The Fed estimated that hurricanes accounted for 2.25% of the decline.

The Philadelphia Fed's October manufacturing index registered at -37.5, down from 3.8 in September and worse than the -5 forecast by economists.

Looking at commodities, crude oil dropped $4.69 to settle at $69.85 a barrel. Gold fell $34.50 to close at $804.50 an ounce.

Longer-dated U.S. Treasury securities were mixed. The 10-year note was up 3/32, yielding 3.93%, and the 30-year was down 18/32, yielding 4.22%. The dollar was gaining on the euro and pound but flat against the yen.

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Overseas, European markets such as the FTSE in London and the DAX in Frankfurt were trading lower. In Asia, the Nikkei in Japan and the Hang Seng in Hong Kong closed with losses.