Stocks were trading sharply higher Wednesday following a handful of reports that offered some hope that the U.S. economy was improving.
TheDow Jones Industrial Average was up more than 140 points, led by United Technologies , American Express and Boeing . Hewlett-Packard slipped.
The S&P 500 and the tech-heavy Nasdaq were also higher. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell near 19.
All key S&P sectors were higher, led by consumerdiscretionary, industrials and technology.
Trading volume is expected to be light ahead of Thanksgiving Day on Thursday. Stock and bond markets will be closed for the holiday and stocks will reopen for short sessions on Friday.
Stocks were hammered in the previous sessionafter North Korea fired artillery shellson an island in South Korea Tuesday, causing deaths and sparking widespread condemnation.
The situation in Korea would likely mean continued volatility for the coming days and possibly weeks, Shaun Cochran, head of research of CLSA, told CNBC.
"In our portfolios we are positioning for that increased volatility, we're not seeing this as an immediate buying opportunity," Cochran said.
But Richard Kim, head of Korean sales at Auerbach Grayson, said investors could earn trading profits of 20 percent short-term on certain Korean stocks.
In the day's earnings news, Deere was up slightly after the world's largest maker of farm equipment reported stronger-than-expected quarterly profitand forecast 2011 earnings below expectations.
Upscale jeweler Tiffany posted profit and sales that handily beat estimates and said it expects strong holiday sales.
Guess shares jumped after the apparel company reported a quarterly profit that far exceeded expectations helped by robust expansion overseas.
Other retailers also rallied ahead of the holiday shopping season including Wal-Mart , Target and Costco . This year, more big-box retailers will begin their Black Friday sales earlier than ever Friday morning, and more are starting to open on Thanksgiving Day.