Stocks finished the session sharply higher Wednesday ahead of the Thanksgiving holiday, following a handful of reports that offered some hope that the U.S. economy was improving.
TheDow Jones Industrial Average soared 150.91 points, or 1.4 percent to finish at 11187.28.
United Technologies , Caterpillar and Boeing led the blue-chip index higher, while Hewlett-Packard slipped.
The S&P 500 gained 17.62 points, or 1.5 percent to end at 1198.35. The tech-heavy Nasdaq rose 48.17 points, or 1.9 percent to finish at 2543.12. 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 was 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 down slightly even after the world's largest maker of farm equipment reported stronger-than-expected quarterly profitand forecast 2011 earnings below expectations.
Tiffany jumped after the upscale jeweler posted profit and sales that handily beat estimates and said it expects strong holiday sales.
Guess shares soared more than 10 percent 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.