North American stocks pulled an impressive U-turn on Thursday, as investors ignored longer-term economic concerns and instead focused on strong earnings reports and less-than-expected declines in U.S. existing home sales in June.
The Dow Jones industrial average closed at 10,322.30, up 201.77 points or 2 per cent. The broader S&P 500 closed at 1,093.67, up 24.08 points or 2.3 per cent. In Canada, the S&P/TSX composite index closed at 11,667.76, up 154.43 points or 1.3 per cent.
The moves represent the strongest gains in major indexes since the unofficial start of the second quarter earnings season, on July 12.
Caterpillar Inc., 3M Co. and United Parcel Service Inc. reported better-than-expected earnings - and the bellwether status of these companies challenged the assertion by some observers (and, increasingly, recent economic data) that the economic recovery is sputtering.
Boeing Co. rose 5.4 per cent over an ongoing surge in aircraft orders at the Farnborough International Airshow. American Express Co. rose 5 per cent ahead of its second quarter results, released after markets closed, of 84 cents (U.S.) a share, up from 9 cents last year.
Meanwhile, Microsoft Corp. rose 2.9 per cent ahead of its quarterly results, which also topped expectations. The technology company reported net earnings of 51 cents a share, ahead of analysts' forecasts of 46 cents. Revenue of more than $16-billion also beat forecasts.
Among key Canadian stocks, life insurers were particularly strong, with Manulife Financial Corp. and Sun Life Financial Inc. up 4.5 per cent each.
Canadian National Railway Co. rose 2.8 per cent ahead of reporting net earnings of $1.13 (Canadian) in the second quarter, well ahead of expectations for earnings of $1. Canadian Pacific Railway Ltd. also rose 2.8 per cent.
Loblaw Cos. Ltd. rose 0.9 per cent after it reported a dip in its quarterly earnings, to 64 cents a share form 70 cents last year.