By Anora Mahmudova and Carla Mozee, MarketWatch

NEW YORK (MarketWatch) -- The U.S. stock market moved sharply higher on Thursday, as investors cheered upbeat manufacturing data from eurozone and better-than-expected earnings from Caterpillar Inc, 3M Co and General Motors.

Weekly jobless claims rose last week, but remained below the key 300,000 level for the sixth straight week, reflecting the low level of layoffs taking place in the economy.

Strong quarterly results from Dow components, Caterpillar Inc., and 3M sent the Dow Jones Industrial Average (DJI) soaring nearly 200 points, or 1.1%, to 16,655

The S&P 500 (SPX) gained 18 points, or 0.95%, to 1,948.69. The Nasdaq Composite (RIXF) jumped about 43 points, or around 1%, to 4,425.2.

Data: Markit said the initial October reading of its eurozone manufacturing purchasing managers index reached a two-month high at 50.7, above expectations of a reading at 50. The report offered some upbeat news at a time when worries about slowing global economic growth have prompted investors to sell off equities world-wide.

But the report also suggested manufacturers and service providers don't expect a significant pickup in the pace of activity in the coming months. Markit will release its initial October purchasing manufacturing index for the U.S. at 9:45 a.m. Eastern Time.

The number of people who applied for U.S. unemployment benefits rose by 17,000 last week to 283,000. Economists polled by MarketWatch had expected claims to rise to a seasonally-adjusted 285,000 in the week ended Oct. 18.

The Federal Housing Finance Agency was slated to post a report on home prices for August at 9:00 a.m., and the Conference Board's leading indicators data are set for release at 10 a.m. Eastern.

Earnings: Shares of Dow industrials component Caterpillar (CAT) leapt 4.6%. The heavy-equipment maker raised its earnings outlook for the year to $6.50 a share, from $6.20, while keeping the midpoint of its revenue view unchanged. Third-quarter adjusted earnings of $1.72 a share outstripped expectations of $1.36 a share.

3M (MMM), another component of the Dow Jones Industrial Average, said third-quarter earnings were $1.98 a share, above expectations of $1.96 a share from a FactSet survey of analysts. Sales of $8.1 billion, however, were shy of Wall Street's estimate of $8.227 billion. Shares of the maker of Post-it notes and other industrial goods rose 4.7%.

General Motors (GM.XX) posted earnings, excluding one-time costs, of 97 cents a share, higher than projections of 95 cents a share. GM rose 0.9%.

Shares in Tractor Supply Co (TSCO) surged 16%, after it reported quarterly results after the market close on Wednesday, beating consensus estimates. The stock was raised to strong buy from market-perform by Raymond James.

Southwest Airlines Co. (LUV) reported third-quarter adjusted earnings of 55 cents a share, more than Wall Street's estimate of 53 cents a share. Shares gained 2.5%. Southwest stock gained more than 85% since the start of the year.

Under Armour (UA), which makes athletic apparel, reported third-quarter profit and sales above expectations, but shares fell 4.5% after surging 51% so far this year.

Shares of Yelp (YELP) dropped 15%. The online review site late Wednesday posted better-than-expected third-quarter results but issued a weak outlook.

After the bell, Amazon.com Inc. (AMZN) and Microsoft Corp. (MSFT) will release financial reports. (Read more about the day's notable stocks in Movers & Shakers column: http://www.marketwatch.com/story/comcast-gm-3m-visa-in-focus-thursday-2014-10-23.)

Other markets: In Asia overnight, stocks in Tokyo and Hong Kong finished modestly lower. European stocks were higher in a choppy trade. Gold futures (GCZ4) fell and oil prices (CLZ4) edged up.

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