Stocks Gain as China Manufacturing Shines, Ford Revs

NEW YORK ( TheStreet) -- Markets traded higher Thursday amid strong earnings from bellwethers 3M ( MMM) and Ford ( F) combined with improved manufacturing data from China, the world's second largest economy. 

The S&P 500 rose 0.33% to 1,752.07 while the Dow Jones Industrial Average was up 0.62% to 15,509.27. The Nasdaq added 0.56% to 3,928.96.

"We took our lead from the strength coming out of China's numbers last night," said Jon Sablowsky, head of trading at Brownstone Investment Group. "The numbers that have been coming out of the companies has been mediocre -- sort of typical sloppy top line, not seeing a lot of growth -- but ... it's providing some comfort."

Ford rose more than 1% after the auto company's earnings lifted to $2.6 billion or 45 cents a share, beating expectations for 38 cents a share. Higher demand for its F-Series pickups in the U.S. helped boost results.

3M gained slightly after the diversified technology company beat expectations with third quarter revenues up 6% to $7.92 billion. It earned $1.78 a share in the third quarter up from $1.65 per share in the prior corresponding period. 

"This is one of the most watched weeks for earnings and investors want to see companies meeting guidance - the Chinese data also underscored stronger global demand," Prudential Financial market strategist Quincy Krosby said in a phone interview. "We're also seeing global companies like 3M report strong numbers and bellwethers like the Dow transports move higher. Lower gasoline prices have strong correlation with market performance and give consumers more disposable income." Prudential Financial manages $1 trillion in assets.

Chinese manufacturing output strengthened more than expected in October, suggesting growth in the world's second-largest economy is gradually recovering. The 50.9 Purchasing Managers Index gauge released by HSBC was up from 50.2 in September.

Amazon  ( AMZN), the world's largest online retailer, reported after the regular trading session a loss of 9 cents a share on sales of 17.09 billion. The profit loss was in-line with analysts polled by Bloomberg data, but sales beat the estimate of $16.76 billion. Shares were climbing 5.2% to $349.50 in the after-hours session.

Software giant  Microsoft  ( MSFT) after the bell reported earnings of 62 cents a share on revenue of $18.53 billion. Analysts had forecast earnings of 54 cents a share in its fiscal first quarter on revenue of $17.79 billion. The software company was surging 5.8% to $35.66 in after hours trading.

AT&T   ( T) lost 1.8% to $34.63 even as its third-quarter earnings topping Wall Street expectations. AT&T earned 66 cents a share on revenue of $32.16 billion, helped by the strength in smartphone sales. Analysts were expecting profit of 65 cents a share on sales of $32.19 billion.

Gold futures for the December contract rose 1.2% to settle at $1,350.30, while WTI crude oil for December delivery dropped 0.26% to close at $97.11. The benchmark 10-year Treasury was dipping 4/32, boosting the yield to 2.516%, while the U.S. dollar index was 0.14% lower at $79.17.

Meanwhile, applications for domestic unemployment benefits are falling at a slower than expected pace data. Jobless claims fell by 12,000 to 350,000 in the week ending October 19, according to a Labor Department report today. Consensus expectations were for a fall to 340,000. 

The U.S. trade deficit was also broadly unchanged in August as global economic growth continues to stutter. The gap widened 0.4 percent to $38.8 billion according to the Commerce Department, above expectations for a $39.4 billion deficit.

--By Jane Searle and Joe Deaux in New York

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