NEW YORK (Reuters) - Stocks on Wall Street climbed more than 1 per cent on Thursday as U.S. corporate earnings continued to beat expectations, while government debt prices slid on stronger American and German economic reports.
Results from Caterpillar Inc and 3M Co, both Dow components, reassured investors that companies with large overseas revenue streams can deliver solid profits despite concerns about global economic growth.
The major U.S. indexes pared gains of nearly 2 per cent in late afternoon trading on news that a potential Ebola patient who recently worked in West Africa with Doctors Without Borders was being tested in New York City.
The stock surge put the benchmark S&P 500 index up 3.4 per cent for this week, reversing four straight weeks of decline, and on track for its biggest weekly gain since January 2013.
"If we're looking at headwinds like currency and slowing global growth, seeing multinationals like Caterpillar and 3M post solid beats gives us confidence that economic growth is holding on and probably better than the market is currently expecting," said Phil Orlando, chief equity market strategist at Federated Investors in New York.
With 177 of the S&P 500 companies having posted third-quarter results, 69.5 per cent have beaten expectations, better than the 67 per cent beat rate over the past four quarters, and higher than the 20-year average of 63 per cent, Thomson Reuters data show.
Wall Street's rally helped turn around European stocks, which initially fell on weak results from some companies, including French tire-maker Michelin, despite support from better-than-expected euro zone business activity data.
The Dow Jones industrial average closed up 216.58 points, or 1.32 per cent, at 16,677.9. The S&P 500 rose 23.71 points, or 1.23 per cent, to 1,950.82 and the Nasdaq Composite gained 69.95 points, or 1.6 per cent, to 4,452.79.
Bond prices fell, with German government bond yields higher after an unexpected uptick in euro zone business surveys staved off fears the bloc was headed for a triple-dip recession. U.S. Treasury yields climbed to their highest levels in nearly two weeks after weekly jobless claims fell to the lowest since December 2000.