The three most-followed indexes all rose about 2.2 percent: The Dow Jones industrial average (^DJI) surged 323 points to 15,126, the Standard & Poor's 500 index (^GPSC) rallied 36 points to 1,692 and the Nasdaq composite index (^IXIC) jumped 82 points to 3,760.
The surge broke a three-week funk in the stock market. Stocks have steadily declined since mid-September as Washington's gridlock got investors worried that the U.S. could default on its debt and wreak havoc on financial markets and the global economy.
A partial government shutdown has continued 10 days after congressional Republicans refused to pass a budget for the new fiscal year without an attachment to defund President Obama's health care law.
In another bullish signal, small-company stocks rose even more than the rest of the market. Those stocks tend to be riskier than large, well-established companies but can also offer investors greater rewards. A sharp increase in small-company stocks means investors are more comfortable taking on risk. The Russell 2000 index (^RUT) jumped 24.4 points, or 2.3 percent, to 1,067.86. The Russell is just 19.57 points below its all-time high of 1,087.43, which it reached Oct. 1.
In commodities trading, the price of benchmark crude oil for November delivery rose $1.40, or 1.4 percent, to $103.01 a barrel, while gold lost 21.90, or 1.7 percent, to $1,285.00 an ounce.
In corporate news, Best Buy (BBY) shares jumped 7.6 percent to $39 on heavy volume. The electronics retailer is about to debut a trade-in promotion program where customers can swap an old smartphone for a $100 gift card that can be used to buy the new Apple (AAPL) iPhone 5s and 5c.
More Stocks in the News:
- Shares of Stonegate Mortgage rose 14 percent to $18.25 in their trading debut Thursday, after the home lender raised nearly $114 million in its initial public offering. The Indianapolis-based company priced its offering of 7.1 million shares at $16 a share. That's below the range of $20 to $22 a share that it expected.
- Lindsay Corp. (LNN) fell 5.9 percent to $75.35 after posting earnings fell short of market expectations. The irrigation equipment maker reported a 19 percent jump in fourth-quarter net income on improved revenue but analysts were anticipating earnings of 91 cents a share on revenue of $155.7 million for the quarter.
- L Brands (LTD) fell 4.1 percent to $56.60 after reporting sales at stores open at least a year climbed 1 percent in September, but the results fell short of Wall Street expectations. The Columbus, Ohio, company, which owns Victoria's Secret, Bath & Body Works and other brands, also said it plans to sell $500 million in new debt.
- Teva Pharmaceuticals (TEVA) rose 3.6 percent to $40.59 after the generic drug maker announced it was cutting its workforce by 10 percent.
- Ruby Tuesday (RT) plunged 17.1 percent to $6.26. The restaurant chain reported a wider first quarter loss than expected, citing increased competition a difficult economic climate.
- Citrix Systems (CTXS) slumped 11.9 percent to $58.75 after the company warned investors that its third-quarter revenue and profit will miss Wall Street expectations.
- Shares of Invesco (IVZ) rose 5.5 percent to $33.92 a day after the investment management company reported a 9.1 percent yearly jump in the amount of funds it manages. As of Sept. 30, Invesco had $745.5 billion in assets under management.
- Aruba Networks (ARUN) shares jumped 6.4 percent to $19.38 after it said that it plans to buy back up to $100 million additional shares of its stock.
- Shares of Gilead Sciences (GILD) advanced 6.5 percent to $62.74 after the company reported successful results from a trial of an experimental cancer drug.
- The University of Michigan releases its initial survey of Consumer Sentiment for October at 9:55 a.m. Eastern time.
These major companies are scheduled to report quarterly financial results before U.S. markets open.