The market reversed Wednesday's decline, indicating that investors may have overreacted to the comments by Federal Reserve Chair Janet Yellen that raised fears of a sooner-than-expected interest rate hike.
In addition, a Philadelphia Federal Reserve report on manufacturing Thursday indicates the pace of economic growth could be picking up.
The Dow Jones industrial average (^DJI) rose 109 points, while the Nasdaq composite (^IXIC) and the Standard & Poor's 500 index (^GPSC) both gained 11 points.
Financial stocks, both big and small, led the way. Bank of America (BAC) -- which sponsors this report -- JPMorgan (JPM), Citigroup (C) and Morgan Stanley (MS) all gained about 3 percent. That's part of the market's rethinking of Wednesday's Fed news. And it wasn't just the money center banks. Zions Bancorp (ZION) and SVB Financial Group (SIVB) both gained more than 3 percent.
In the tech sector, Microsoft (MSFT) gained nearly 3 percent and Intel (INTC) rose 1.5 percent.
A pair of semiconductor equipment-makers rose on a "buy" rating from Nomura Securities. Applied Materials (AMAT) and Lam Research (LRCX) both gained 3.5 percent.
But housing stocks gave back the gains that followed KB Home's (KBH) strong earnings on Wednesday. Lennar (LEN) fell 3 percent despite strong quarterly results. D.R. Horton (DHI) and Hovnanian Enterprises (HOV) also lost nearly 3 percent.
The hot 3-D printing sector had some cold water splashed on it. Exone (XONE) tumbled 10 percent, 3D Systems (DDD) fell nearly 4 and Stratasys (SSYS) lost 2 percent -- after Hewlett-Packard (HPQ) said it plans to enter the 3-D printing business.
Elsewhere, furniture-maker Herman Miller (MLHR) jumped 9 percent after raising its earnings outlook.
Ulta Salon Cosmetics & Fragrance (ULTA) gained another 3 percent following a Goldman Sachs (GS) recommendation. It has soared 16 percent in just five days. But apparel-maker Guess (GES) fell 5 percent after forecasting a loss in the current quarter.
-Produced by Drew Trachtenberg.
What to Watch Friday:
These major companies are scheduled to release quarterly financial statements: