Surprisingly strong earnings from Netflix, UnitedHealth Group and other companies put investors in a buying mood Tuesday, driving U.S. stocks solidly higher.
Healthcare stocks led the gainers. Materials, utilities and a broad swath of other companies also climbed. Industrials and consumer-focused stocks notched the smallest gains. Energy stocks rose as the price of crude oil recovered from an earlier slide.
The rally wiped out the market's losses from the day before.
"We've had five consecutive quarters of negative earnings, and this one looks like we're going to squeak out a positive, which is very good for the market," said Doug Cote, chief market strategist for Voya Investment Management. "Earnings are coming in better, and some much better, than expected."
The Dow Jones industrial average rose 75.54 points, or 0.4%, to 18,161.94. The Standard & Poor's 500 index climbed 13.10 points, or 0.6%, to 2,139.60. The Nasdaq composite index advanced 44.01 points, or 0.9%, to 5,243.84.
Investors are poring over company earnings reports to gauge the market's prospects for growth in coming months and get a better handle on the state of the economy. About 10% of the companies in the S&P 500 have posted quarterly results since the latest reporting period began last week, and about 80 were scheduled to report this week.
Third-quarter earnings are projected to be down about 1.1% overall from a year earlier, according to S&P Global Market Intelligence. That forecast is largely due to the energy sector, which has been hit hard by falling energy prices.
Although it's still early, some market watchers are encouraged by the results so far.
"It looks like corporate earnings certainly could start to trend positive," Cote said. "Fundamentals drive markets and positive earnings are a necessary precursor for this bull market to continue."
Healthcare, which has been the worst performing sector this year, notched the biggest gain Tuesday: 1.1%. It remains down 2.6% this year.
Investors bid up shares in several companies in the sector, including UnitedHealth Group.
The nation's largest health insurer climbed 6.9% to $143.39 after its profit swelled 23% to nearly $2 billion in the third quarter. The company also raised its 2016 earnings forecast.
Netflix surged 19% to $118.79 the day after the video streaming service reported earnings that were far better than analysts expected. The company noted it increased its domestic and international subscribers during the quarter.
Domino's Pizza jumped 4.9% to $159.45 after the company delivered a 25% leap in quarterly profit as sales rose.
Del Taco Restaurants climbed 8.8% to $13.74 after the restaurant chain served up solid third-quarter sales. It also raised its annual profit and revenue projections.
Banks, several of which reported strong earnings Friday, continued to deliver strong quarterly results. Goldman Sachs shares rose 2.1% to $172.63 after growth in its trading and investment business helped lift earnings. Comerica also posted better-than-expected quarterly results, and its shares climbed 4.1% to $50.05.
Some companies reported improved results but missed on their earnings forecasts.
IBM slid 2.6% to $150.72 the day after issuing a full-year earnings outlook that fell short of analyst expectations.
U.S. benchmark crude oil rose 35 cents, or 0.7%, to $50.29 a barrel. Brent crude, the international standard, rose 16 cents, or 0.3%, to $51.68 a barrel.
Other energy futures eked out small gains. Wholesale gasoline inched up a penny to $1.51 a gallon. Heating oil was little changed at $1.57 a gallon. Natural gas rose 2 cents to $3.26 per 1,000 cubic feet.
The major stock indexes in Europe also rebounded Tuesday. Germany's DAX rose 1.2%, and the CAC-40 in France gained 1.3%. The FTSE 100 index of leading British shares rose 2%.
Several stock markets in Asia also pushed higher. Japan's Nikkei 225 advanced 0.4%, South Korea's Kospi gained 0.6% and Hong Kong's Hang Seng index jumped 1.6%.
Australia's S&P/ASX 200 rose 0.4%.
Gold rose $6.30 to $1,262.90 an ounce. Silver rose 16 cents to $17.64 an ounce. Copper was little changed at $2.11 a pound.
Bond prices rose. The yield on the 10-year Treasury note fell to 1.74% from 1.77% late Monday.
The dollar strengthened to 103.89 yen from 103.85 yen and the euro weakened to $1.0977 from $1.0997.
3:30 p.m.: This article was updated with closing prices and analysis.
1:35 p.m.: This article was updated with the close of markets.
8:10 a.m.: This article was updated with more recent prices and additional information.