The Federal Reserve said output by U.S. factories, mines and utilities climbed in September despite the effects of Hurricane Florence, and the Labor Department said U.S. employers posted the most jobs in two decades in August while hiring continued to increase.
KEEPING SCORE: The S&P 500 index jumped 40 points, or 1.5 percent, to 2,790 as of 11:25 a.m. Eastern time. The Dow Jones Industrial Average rose 365 points, or 1.5 percent, to 25,615. The Nasdaq composite climbed 138 points, or 1.9 percent, to 7,568 as technology companies reversed some of their losses from the last few days. The Russell 2000 index of smaller-company stocks rose 21 points, or 1.4 percent, to 1,574.
Earnings for U.S. companies climbed about 20 percent in each of the first two quarters of 2018 as economic growth picked up and corporate taxes were slashed. Analysts expect similar results in the current period.
Stocks have gyrated over the last few days following one of their biggest declines of the year last week. The S&P 500 fell 6.9 percent from its record high on Sept. 20 to its recent low on Thursday. It suffered a dizzying 10 percent drop in just nine days in late January and early February, and lost 7.3 percent during a downturn in March.
HEALTHY: UnitedHealth, the largest U.S. health insurer and provider of privately-run Medicare Advantage plans, once again topped Wall Street forecasts and raised its projections for the year. The stock climbed 4.1 percent to $271.05. Other health insurers also rose. Cigna advanced 3.7 percent to $222.48 and Humana rose 2.8 percent to $325.82. Medicaid service company Molina Healthcare jumped 4.2 percent to $142.99.
Health care products giant Johnson & Johnson rallied 1.6 percent to $136.06 after it said prescription sales jumped. Its results, too, were stronger than analysts expected. Johnson & Johnson and UnitedHealth are both Dow components.
WEALTHY: Morgan Stanley rose 4.3 percent to $45.35 and Goldman Sachs added 1.9 percent to $219.35 after the two investment banks did better than expected in the third quarter, helped by strong performance in their trading operations and better-than-expected revenue from stock underwriting. Both make most of their money from advising wealthy clients and corporations on deals, and Morgan is known for stock trading while Goldman emphasizes bonds, commodities and currencies.
Both have seen their stocks sink about 14 percent this year. TECH UPDATE: Technology companies rose. Microsoft jumped 2.7 percent to $110.47 and Adobe rallied 7.9 percent to $256.75 after it backed its fourth-quarter profit and revenue forecasts. The stock has jumped 46.5 percent this year, but had slumped in recent days. Internet companies also advanced. Alphabet, Google's parent company, rose 2.4 percent to $1,128.69 and Facebook added 2.2 percent to $156.87.
Email delivery company Sendgrid climbed 7 percent to $33.09 after cloud communications platform company Twilio agreed to buy it for $36.92 per share in stock, or $1.7 billion. Twilio fell 8.9 percent to $69.39.
O CANNABIS: On Wednesday Canada will legalize marijuana nationwide. While cannabis companies mostly traded lower Tuesday, the stocks have made huge gains this year in highly volatile trading. Tilray fell 3.3 percent to $160.25 while Cronos Group rose 0.3 percent to $11.77 and Canopy Growth lost 5.2 percent to $53.96.
On Tuesday Benchmark Capital analyst Mike Hickey started coverage of Tilray with a $200 price target, saying its supply deals with pharmacies and a partnership with drugmaker Novartis will help make it an early leader in the market. Hickey valued the Canadian cannabis market at about $3.2 billion in 2019 and said it will climb to $8.1 billion by 2023.
Tilray's market value stands at almost $15 billion, up ninefold since it went public in mid-July, and Canopy Growth has more than doubled in value to $12.5 billion. Canopy announced a $4 billion investment from Corona beer maker Constellation Brands in August. The huge gains reflect investors' view that that other countries will legalize marijuana in the years to come.
ENERGY: U.S. benchmark crude oil lost 0.1 percent to $71.71 per barrel in New York. Brent crude, the international standard, was little changed at $80.80 per barrel in London. BONDS: Bond prices edged lower. The yield on the 10-year Treasury note rose to 3.17 percent from 3.16 percent.
CURRENCIES: The dollar rose to 112.15 yen from 111.88 yen. The euro rose to $1.1588 from $1.1584. OVERSEAS: France's CAC 40 added 1.5 percent while the DAX in Germany jumped 1.4 percent. Britain's FTSE 100 rose 0.4 percent. Italy's FTSE MIB jumped 2.2 percent after the government avoided last-minute delays in presenting a budget plan
Japan's benchmark Nikkei 225 rallied 1.2 percent and the Kospi in South Korea was little changed. Hong Kong's Hang Seng index finished 0.1 percent higher.
AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP