U.S. stocks climbed broadly Thursday following strong earnings from Caterpillar, 3M and United Parcel Service, while better than expected data on U.S. existing home sales and euro zone economic activity also provided a boost.

The Dow Jones Industrial Average rose 201.77 points, or 1.99%, to 10322.30, marking its biggest one day gain since July 7 and its highest close since July 15.

Boeing led the measure's gains with a jump of 3.42, or 5.4%, to 66.60, after European rival aircraft manufacturer Airbus raised its order intake target for 2010.

Among the Dow's earnings reporters, 3M jumped 2.45, or 3%, to 84.75, after the manufacturing giant posted a 43% jump in second quarter earnings while its sales rebounded to levels last seen two years ago.

AT&T added 59 cents, or 2.4%, to 25.51, after the telecommunications company reported a 26% increase in second-quarter earnings, benefiting from iPhone activations. Caterpillar climbed 1.13, or 1.7%, to 68.

The industrial giant posted a 91% surge in quarterly profit and boosted its full year earnings outlook. However, Travelers fell 58 cents, or 1.2%, to 49.29.

Record claims costs from storms in the Midwest caused the insurer's second-quarter profit to fall 9.5%. The company also pared back the high end of its estimate for full year earnings.

The Nasdaq Composite advanced 58.56, or 2.68%, to 2245.89. The Standard & Poor's 500 index gained 24.08, or 2.25%, to 1093.67.

All of the S&P 500's sectors climbed, led by industrials, boosted by strong reports from UPS and Union Pacific in addition to the reports from 3M and Caterpillar.

UPS jumped 3.14, or 5.2%, to 63.15, after the shipping giant posted a 90% surge in second quarter profit on higher package volume, revenue growth and substantial margin improvement, and boosted its 2010 earnings guidance. Shares of rival FedEx climbed 4.50, or 6.1%, to 78.53.

Meanwhile, Union Pacific climbed 3.28, or 4.8%, to 72.40, as the railroad company's second-quarter earnings also topped analysts' expectations.

The gains followed encouraging economic data from the euro zone its composite purchasing managers index and industrial orders both unexpectedly rose as well as a smaller than expected drop in U.S. existing home sales.

In addition, investors found Thursday's round of data particularly encouraging because a number of bellwether companies posted revenue that topped analysts' estimates and climbed from the prior year, reversing a trend seen in recent days of companies missing revenue expectations even as their earnings beat estimates.

European Market

European stocks finished sharply higher Thursday, with investors setting aside fears regarding Friday's bank stress test results and embracing stronger than expected economic data from the both the euro zone and the U.S.

The euro zone's composite purchasing managers index, which includes manufacturing as well as service industries, rose to 56.7 in July from 56.0 in June, instead of falling to 55.2 as expected. In addition, euro zone industrial orders rose 3.8% in May.

That beat consensus expectations for the orders to remain unchanged after a revised 0.6% increase in April.

Adding to the positive tone in Europe, data from the U.S. showed sales of existing homes slid in June but not nearly as sharply as had been feared.

The second monthly decline stemmed in large part from the expiration earlier this year of a government tax credit aimed at boosting the housing market. In the U.S., the index of leading economic indicators fell 0.2% in June, better than an expected 0.3% drop, the Conference Board said Thursday.

Thursday's relatively solid economic data in Europe and the U.S. aligned with strong corporate earnings news to boost stocks. Regionally, the pan-European Stoxx 600 index advanced 2.0% at 254.37.

The U.K.'s FTSE 100 index added 1.9% to 5313.81, France's CAC-40 index ended up 3.0% at 3600.57 and Germany's DAX rose 2.5% to 6142.15 Banks with large exposure to peripheral European sovereign debt were notably higher on Thursday with BNP Paribas shares surging 4.8% and Credit Agricole shares up 5.6%. The pan-European Stoxx 600 Europe banks index closed 3.1% higher at 211.13.

Aside from the crucial EU wide bank stress tests, Friday also sees the release of Germany's Ifo survey and the second-quarter preliminary reading of U.K. gross domestic product data.

In major market action: EADS shares rallied 5.9% after its Airbus plane making unit lifted its full year order target to more than 400 from about 300 after greater than expected demand at a commercial air show.

Greek banks also advanced, with U.S. listed shares of National Bank of Greece trading up 6%. Earlier in the week, the Greek finance minister said that Greek banks would pass the stress tests. The ASE Composite stock index in Athens gained 2.7%.

In the car sector, shares of Daimler jumped 2% and Renault rose 3.4%. Earnings related gainers in Europe included handset giant Nokia, whose shares gained 2.6%.

Nokia reported a sharp drop in quarterly profit on Thursday as it continued to struggle in the market for high end phones. Excluding one time items, the company earned 11 European cents a share, in line with consensus estimates.

Swiss power and automation firm ABB rose over 4% after it reported second quarter net profit that beat analyst forecasts. Roche Holding shares ended up 1% after the Swiss drugmaker reported an 8% rise in adjusted first half net income and confirmed its full year outlook for 2010.

On the downside, Swiss agrichemicals maker Syngenta ended down 5.3% after its first half net profit dropped 11% to $1.25 billion. Credit Suisse, the first major European bank to report second quarter earnings, declined 1%.

The firm reported a small, but unexpected, rise in second quarter profit, as its bottom line was bolstered by one off gains.

Asian Market

Asian shares ended mixed Thursday as Federal Reserve Chairman Ben Bernanke's downbeat assessment of the U.S. economic outlook spooked investors, sending Japanese stocks lower for a fifth straight session. The day's trading began on weak footing.

Wall Street tumbled overnight after Bernanke, in a testimony to the Congress, said the economic outlook was unusually uncertain, but indicated that no moves to bolster the recovery were imminent.

Traders were also cautious ahead of the release of the European bank stress test results, due Friday.

Japan's Nikkei Stock Average dropped 0.6%, South Korea's Kospi fell 0.8%, Australia's S&P/ASX 200 gave up 0.9% and Taiwan's Taiex shed 0.5%.

China's Shanghai Composite Index added 1.1%, Hong Kong's Hang Seng Index edged up 0.5% and India's Sensex rose 0.7% in afternoon trading.

Dow Jones Industrial Average futures rose 31 points in screen trade. Exporters were hit in Tokyo by a stronger yen as investors bought into the safe haven Japanese currency.

Elpida Memory shrank 4.4%, Isuzu Motors dropped 2.4% and Nikon Corp. shed 2.3%. Shionogi & Co. bucked the market to jump 3.8% after saying Wednesday that the company and GlaxoSmithKline will start a phase three clinical study on an HIV infection treatment following favorable results from phase two trials.

Chinese property stocks led the gains in Shanghai following a report from the financial web site NetEase, which cited unnamed sources as saying the country's Ministry of Finance planned to start levying a real estate tax on home owners in selected cities from 2012, later than had been suggested in recent speculation. China Vanke jumped 2.6%, Poly Real Estate Group rose 4.5% and Gemdale Corp. advanced 2.4%.

Shares of Agricultural Bank of China rose 2.5% in Hong Kong and 0.7% in Shanghai, boosted by an exchange filing that showed U.S. fund Capital Research & Management Co. bought a 12.79% stake in the company's Hong Kong listed H-shares on their debut Friday, signaling long term confidence in the Chinese lender.

Australian shares declined as investors took a dim view of Bernanke's cautious comments. However, losses were contained by gains in some resource heavyweights after Wednesday's strength in base metal prices.

BHP Billiton rose 0.3% and Rio Tinto added 0.6%. In Seoul, Hynix Semiconductor shares slumped 4.2% in a broad market hobbled by the weak Wall Street lead, even though the company reported before the market opened that it had swung to a second quarter net profit from a year earlier loss, bolstered by strong chip prices and corporate demand for personal computers and handheld devices.

Samsung Electronics fell 1.1% and LG Display lost 3%, with Hyundai Motor down 2.6% among automakers.

Korea Electric Power Corp. added 0.6% despite posting a worse than expected second quarter net loss of KRW814.8 billion, compared to a net profit a year earlier.

The gains came in the wake of news earlier in the day that South Korea's National Pension Service planned to buy more shares in the company, raising its maximum investment to 5% from its current 2.8% over the next three years.

SK Energy soared 7.2% on news it has been chosen as the supplier of rechargeable batteries to the Hyundai-Kia Automotive Group.

Elsewhere in the region, Philippine shares slipped 0.1% and New Zealand's NZX 50 declined 0.7%.

By late afternoon, Singapore's Straits Times Index added 1.0%, Indonesian shares fell 0.1%, while Thailand's SET Index was up 0.2%.

Commodities

Copper led a strong rally across the base metals on the London Metal Exchange Thursday, reaching a two month high on fund buying and short covering.

Triple digit gains on the Dow Jones Industrial Average also helped, as strong earnings results and better than expected euro zone economic data gave markets a dose of confidence following Wednesday's selloff.

Copper rose above $7,000 a metric ton for the first time since the end of May, and more importantly for technical analysts, broke above the 200 day moving average of $6,986.39/ton.

Inventories fell to their lowest since last November Thursday, and about 10% of the 416,525 tons in warehouses has already been booked to be withdrawn. In other metals, nickel closed above $20,000/ton, rising 3.9% as it caught up with the gains other metals have made this week.

European stress test results will be released Friday and analysts said they could prove a key factor in prolonging or reining in this week's rally.

Crude oil futures soared nearly 4% Thursday, as investors had high hopes a mostly upbeat slate of corporate results will translate in more energy demand and a tropical depression brewed in the Caribbean.

Crude oil for September delivery gained $2.74, or 3.6%, to $79.30 a barrel on the New York Mercantile Exchange.

That was oil's highest price in nearly one month. Natural gas futures rose 2.9% despite faltering after an inventories report.

Gold staged a comeback Thursday, posting gains after bottom fishers came in to snap up the metal at bargain prices and as other commodities rallied on enthusiasm about U.S. corporate earnings.

Gold futures for August delivery added $3.80, or 0.3%, to $1,195.60 an ounce in electronic trade on the New York Mercantile Exchange. Prices had hit an intraday low of $1,180.70 an ounce, according to FactSet Research.