By Anora Mahmudova and Carla Mozee, MarketWatch
NEW YORK (MarketWatch) -- Thursday's positive momentum, fueled
by upbeat eurozone data and better-than-expected earnings results,
sent key stock benchmarks up more than 1%.
Investors rushed into cyclical stocks, such as industrials and
energy sector and unloaded investments considered safe, such as
Treasurys, sending the yield on a 1-year Treasury note up 4 basis
points to 2.27%.
Strong quarterly results from Dow components, Caterpillar Inc.,
and 3M sent the Dow Jones Industrial Average (DJI) at one point
soaring 300 points. The blue-hip index was last trading 223 points,
or 1.4%, higher at 16,688.50. The Dow components, 3M and
Caterpillar, each saw roughly 4% gains in their respective share
prices--contributing one third of the Dow's rally.
The S&P 500 (SPX) gained 33 points, or 1.8%, to 1,960.55,
with the industrials and energy sector stocks leading broader
market gains.
The Nasdaq Composite (RIXF) jumped 89 points, or 2%, to
4,472.31.
Also pushing higher was the Dow Transportation average (DJT) ,
which jumped 207 points, or 2.5%, to 8,519.8.
Investors welcomed manufacturing data from eurozone, which
offered some upbeat news at a time when worries about slowing
global economic growth have prompted investors to dump equities
world-wide. But the report also suggested manufacturers and service
providers don't expect a significant pickup in the pace of activity
in the coming months.
The flash PMI index number for the U.S. fell to a three-month
low in October, but still indicated growth, though details of the
report suggest the economy could downshift further in the fourth
quarter.
Weekly jobless claims rose last week, but remained below the key
300,000 level for the sixth straight week, reflecting the low level
of layoffs taking place in the economy.
Earnings: Shares of Dow industrials component Caterpillar (CAT)
leapt 5.4%. The heavy-equipment maker raised its earnings outlook
for the year to $6.50 a share, from $6.20, while keeping the
midpoint of its revenue view unchanged. Third-quarter adjusted
earnings of $1.72 a share outstripped expectations of $1.36 a
share.
3M (MMM), another component of the Dow Jones Industrial Average,
said third-quarter earnings were $1.98 a share, above expectations
of $1.96 a share from a FactSet survey of analysts. Sales of $8.1
billion, however, were shy of Wall Street's estimate of $8.227
billion. Shares of the maker of Post-it notes and other industrial
goods rose 5.4%.
General Motors (GM.XX) posted earnings, excluding one-time
costs, of 97 cents a share, higher than projections of 95 cents a
share. GM slipped 0.6%.
Shares in Tractor Supply Co (TSCO) surged 16%, after it reported
quarterly results after the market close on Wednesday, beating
consensus estimates. The stock was raised to strong buy from
market-perform by Raymond James.
Southwest Airlines Co. (LUV) reported third-quarter adjusted
earnings of 55 cents a share, more than Wall Street's estimate of
53 cents a share. Shares initially gained, but by afternoon fell
3.8%. Southwest stock gained more than 80% since the start of the
year.
Shares of Yelp (YELP) dropped 16%. The online review site late
Wednesday posted better-than-expected third-quarter results but
issued a weak outlook.
After the bell, Amazon.com Inc. (AMZN) and Microsoft Corp.
(MSFT) will release financial reports. (Read more about the day's
notable stocks in Movers & Shakers column:
http://www.marketwatch.com/story/comcast-gm-3m-visa-in-focus-thursday-2014-10-23.)
Other markets: 10-year Treasury note yield jumped 7 basis points
to 2.29%. In Asia overnight, stocks in Tokyo and Hong Kong finished
modestly lower. European stocks closed higher, with the benchmark
index rising 0.7%. Gold futures (GCZ4) fell $16 and oil prices
(CLZ4) rose.
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