Dow rises 217 points as U.S. stocks notch solid gains
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NEW YORK (MarketWatch) - U.S. stocks came off their session highs on Thursday, but the main benchmarks still closed with solid gains.
Thursday's positive momentum was fueled by upbeat eurozone data and better-than-expected earnings results.
Investors rushed into cyclical stocks, such as industrials and the energy sector, and unloaded investments considered safer havens, such as Treasurys, sending the yield on a 10-year Treasury note up 6 basis points to 2.28%.
Strong quarterly results from components Caterpillar Inc. and 3M sent the Dow Jones Industrial Average higher by as much as 300 points during the session. The blue-chip index closed 216.58 points, or 1.3%, higher at 16,677.90.
Caterpillar and 3M shares, in fact, were together responsible for one-third of the Dow's rally.
The S&P 500 gained 23.71 points, or 1.3%, to finish at 1,950.82, with the industrial and energy sectors leading the way.
The Nasdaq Composite jumped 69.95 points, or 1.6%, to close the day at 4,452.79.
Also pushing higher were the Dow transports which jumped 174 points, or 2.1%, to 8,786.49.
Jeffrey Kleintop, chief global investment Strategist at Charles Schwab, credited upbeat earnings and an optimistic outlook from Caterpillar as the day's driving forces, alongside positive economic data from Europe and China, which alleviated recent fears of global slowdown.
Kleintop added that, while it is possible the recent correction has run its course, 'volatility is here to stay.' Data: CBOE Volatility Index.
'Investors will have to get used to an environment [marked by a reduction in] Fed backing, higher volatility and a dearth of uncorrelated assets. This calls for investors' reassessment of their portfolios and their risk tolerance.'
Early Friday, investors had welcomed manufacturing data from the eurozone, which offered some upbeat news at a time when worries about slowing global economic growth had been prompting investors around the world to dump equities. But the report also suggested manufacturers and service providers don't expect a significant pickup in the pace of activity in the coming months.
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