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.

The Economy

The Labor Department said initial weekly jobless claims rose by 37,000 to 464,000 in the week ended July 17. That level exceeded the 445,000 claims that economists had been anticipating, according to Last week's figure of 429,000 was downwardly revised to 427,000.

The National Association of Realtors said June existing-home sales fell 5.1% to 5.37 million from 5.66 million previously. June's level wasn't as weak as economists had anticipated with a projected drop to 5.09 million.

The Federal Housing Finance Agency said U.S. house prices rose 0.5% in May after rising 0.9% in April, which was upwardly revised from 0.8%.

The Conference Board's leading indicators index for June dipped 0.2% in June, which was milder than the 0.4% drop that analysts had been forecasting, according to

The Energy Information Administration said natural gas storage levels increased by 51 billion cubic feet in the week ended July 16, falling within analysts' projected injection range of 49 billion to 53 billion cubic feet, according to a Platts poll.

Company News

Boeing ( BA), American Express ( AXP) and United Tech ( UTX) topped the Dow on a day when several components released better-than-expected earnings reports.

Travelers ( TRV), meanwhile, was the Dow's worst-performing stock and one of a handful to finish in negative territory. The insurance company missed an earnings estimate of $1.50 a share with a second-quarter profit of $1.39 a share. The company also knocked its year-end earnings guidance down to a range of $5.20 to $5.45 a share, which is lower than the profit of $5.74 a share that analysts have been forecasting.

Economic bellwether UPS ( UPS) topped estimates with a second-quarter profit of 84 cents a share and sales of $12.2 billion. The package delivery company also raised its year-end guidance to a range of $3.35 to $3.45 a share from previous guidance of $3.05 to $3.30 a share.

Caterpillar ( CAT) reported better-than-expected results with second-quarter earnings of $1.09 a share on sales of $10.4 billion and hiked year-end guidance to a range of $3.15 to $3.85 a share, up from prior guidance of $2.50 to $3.25 a share.

AT&T ( T) recorded a second-quarter profit boost of nearly 26% on strong demand for wireless devices like the Apple ( AAPL) iPhone. The telecom posted an adjusted profit of 61 cents a share, beating forecasts for earnings of 57 cents a share, but came in just shy of revenue targets with sales of $30.8 billion. Wall Street had been calling for sales of $30.9 billion.

3M ( MMM) posted a better-than-expected profit of $1.54 a share and sales of $6.73 billion also came in above consensus estimates for sales of $6.66 billion. Additionally, the company issued year-end earnings guidance in the range of $5.65 to $5.80 a share, exceeding analysts' forecasts for a profit of $5.63.

Credit Suisse ( CS) reported second-quarter net earnings that rose 1% to 1.6 billion Swiss francs ($1.53 billion), while revenue slipped 2% to 8.4 billion francs.

In non-earnings news, General Motors said it will acquire AmeriCredit ( ACF) for $3.5 billion. GM said the auto-financing company already has relationships with 4,000 GM dealers.

PC-maker Dell ( DELL) settled charges from the Securities and Exchange Commission related to accounting regularities, agreeing to pay $100 million.

Shares of Amazon ( AMZN) sold off sharply after reporting an earnings miss during the extended-trading session. Though revenue rose 41% since the year-earlier quarter, the online retailer reported earnings of 45 cents a share, which was 9 cents short of the consensus estimate.

Commodities and the Dollar

Following the EIA storage report, natural gas for August delivery added 13 cents to settle at $4.64 per million British thermal units. Meanwhile, crude oil for September delivery gained $2.74 to settle at $79.30 a barrel.

Elsewhere in commodity markets, the August gold contract settled $3.80 higher at $1,195.60 an ounce.

The dollar was trading lower against a basket of currencies, with the dollar index down by 0.9%.


The benchmark 10-year Treasury was down 11/32, lifting the yield to 2.921%.

The two-year note was down 1/32, increasing the yield to 0.572%. The 30-year bond was down by 22/32, strengthening the yield to 3.929%.

--Written by Melinda Peer and Sung Moss in New York.

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