Stocks Log 1% Rally, Lifted by Economic Data

Stocks kicked off the first day of November with a bang as Wall Street cheered a batch of better-than-expected economic reports and as the East Coast continued to recover in the aftermath of Hurricane Sandy.

S&P 500

The Dow Jones Industrial Average jumped 136.16 points, or 1.04 percent, to close at 13,232.62, after falling more than 2.5 percent in October.

Bank of America and Microsoft led the blue-chip gainers.

The S&P 500 advanced 15.43 points, or 1.09 percent, to end at 1,427.59. The Nasdaq rallied 42.83 points, or 1.44 percent, to finish at 3,020.06.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, tumbled below 17.

Most key S&P sectors were higher, led by materials nd techs. Utilities lagged.

"We've seen an improvement in the last month or so in the economic data…but while that's happening, we're seeing sloppy earnings so the contradictions here are loud and clear," said Art Hogan, managing director at Lazard Capital Markets. "We've had a bit of a correction into this earnings season…but the consistency of the improvement in the economic data is what's catching everyone by surprise and it probably portends something for [Friday's] jobs numbers."

Investors will be looking ahead to the nonfarm payrolls data, which will be reported on Friday, as scheduled. The monthly government jobs report, which is expected to show 125,000 jobs added in October, will be the last before the Nov. 6 presidential election. (Read More: Tuesday's Election Still 'Good to Go')

On the economic front, the pace of growth in the U.S. manufacturing sector rose to 51.7 in October, according to the Institute of Supply Management. A reading above 50 indicates expansion in the manufacturing sector. Construction spending rose in September, according to the Commerce Department, hitting its best level in three months.

And consumer confidence index climbed in October to its highest in more than four years, according to the Conference Board.

Among jobs, weekly jobless claims fell to a seasonally adjusted 363,000 in the previous week, according to the Labor Department. Meanwhile, New Jersey and Washington, DC did not turn in data due to hurricane Sandy. As a result, the Labor Department estimated results for the state and for the nation's capital.

The private sector added a better-than-expected 158,000 jobs in October, according to the first report employment data firm ADP released since it changed its methodology.

Meanwhile, non-farm productivity increased in the third-quarter, according to the Labor Department.

Stocks Log 1% Rally, Lifted by Economic Data
Photo by Christopher D. Marinez for

Markets are still recovering from the aftermath of Hurricane Sandy, which forced markets to shut on Monday and Tuesday. The death toll rose to 82, and could climb higher as rescuers searched house-to-house through coastal towns. About 4.7 million homes and businesses in 15 U.S. states remained without power on Thursday, down from a high of nearly 8.5 million.

New York's LaGuardia airport reopened with limited service, a day after Kennedy and Newark airports resumed with limited service.

Early estimates of the economic impact of Hurricane Sandy put the total loss between $30 billion and $50 billion, making it one of the costliest storms in U.S. history. (Read More: Most Expensive Hurricanes in US History)

Utility stocks were among the hardest hit—Exelon, Public Service Enterprise and Dominion were all in the red.

Among earnings, Pfizer posted a profit that matched analysts' forecasts, but revenue fell short following the loss of patent protection on its blockbuster Lipitor cholesterol fighter.

Fellow Dow component ExxonMobil reported quarterly results that topped analysts' predictions though profit dropped from the previous year.

AIG, Starbucks and Chesapeake are among companies slated to post earnings after the closing bell.

Monthly auto sales are also scheduled for release throughout the session.

Advanced Auto Parts surged more than 10 percent after the automotive replacement parts retailer hired Blackstone to explore a sale of the company, people familiar with the situation told CNBC.

Ford announced that Alan Mullaly will remain as president and CEO through "at least 2014," while Americas President Mark Fields will be promoted to COO, a step that prepares him to eventually take over as CEO. In addition, the automaker posted monthly U.S. auto sales that inched up 0.4 percent, far short of the predicted 3.5 percent estimate.

Meanwhile, rival General Motors said auto sales climbed 4.8 percent, edging past expectations for a 4.7 percent gain. Toyota said sales rose 15.8 percent compared with an estimated 24.6 percent gain.

Shares in Asiawere boosted by Purchasing Managers' Index (PMI) data from China that suggested the slowdown in the world's second largest economy is bottoming out.

—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)

On Tap This Week:

FRIDAY: Non-farm payrolls, factory orders, Fed's Williams speaks, Wynn shareholders meeting

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