* UPS, 3M, Caterpillar post robust results, raise outlooks
* Home resales fall less than expected in June
* Indexes up: Dow 2 pct, S&P 2.3 pct, Nasdaq 2.7 pct
* For up-to-the-minute market news see []
(Updates to close, changes byline)
By Rodrigo Campos
NEW YORK, July 22 (Reuters) - Upbeat outlooks from economic
bellwethers 3M, UPS and Caterpillar catapulted U.S. stocks on
Thursday as investors shed some of their fears about the
strength of the recovery.
The parade of prominent names reporting earnings continued
after the market's close with Microsoft Corp <MSFT.O>, whose
shares rose 2.9 percent in regular trading. The software
company reported quarterly results after the close and its
shares were trading little changed in extended hours.
The major indexes posted their largest daily gains in more
than two weeks, led by United Parcel Service Inc <UPS.N>, which
rose 5.2 percent after it raised its outlook. The world's
largest package delivery company is viewed as a barometer of
consumer and business demand.
"UPS guiding higher is a very good sign since the amount of
shipping volume is directly correlated to the strength of the
economy," said Peter Jankovskis, co-chief investment officer of
OakBrook Investments LLC in Lisle, Illinois.
Caterpillar Inc <CAT.N>, up 1.7 percent to $68, and 3M
<MMM.N>, up 3 percent to $84.75, were among multinationals that
raised their outlooks, suggesting the global economy may also
be on a stronger footing.
"The companies that are doing well generally are the ones
that have significant overseas revenues or some kind of unique
product," said Kim Caughey, senior equity research analyst at
Fort Pitt Capital Group in Pittsburgh.
The Dow Jones industrial average <> gained 201.77
points, or 1.99 percent, to 10,322.30. The Standard & Poor's
500 <.SPX> added 24.08 points, or 2.25 percent, to 1,093.67.
The Nasdaq Composite <> rose 58.56 points, or 2.68
percent, to 2,245.89.
Thursday's rally reversed losses from a day earlier after
testimony by Federal Reserve Chairman Ben Bernanke soured
investors on the economic outlook.
But for the fourth time this month the S&P 500 failed to
break through 1,100, a level that is proving to be a tough
hurdle and could be in the way of further gains.
Earlier on Thursday, data showed weekly applications for
unemployment insurance rose. Job growth has slowed after strong
gains early in the year, cutting into household spending and
holding back the economy's recovery from the toughest recession
since the 1930s.
"We can't find a story that's going to convince us
unemployment is going to materially get better any time soon
and that weighs on the consumer, who controls a lot of the
economy," Caughey said. "That's a prevailing negative force
investors think about."
After the closing bell, online retailer Amazon.com Inc
<AMZN.O> tumbled 15 percent following its quarterly results.
Home resales hit a three-month low in June, a smaller
decline than economists expected, while the median home sale
price rose by 1 percent from the previous year.
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Homebuilders stocks rose. KB Home <KBH.N> rose 3.9 percent
to $11.06 and Lennar Corp <LEN.N> added 3.1 percent to $14.76.
The PHLX Housing index <.HGX> jumped 4.2 percent.
Advancers outnumbered decliners by almost seven to one on
the New York Stock Exchange, and by five to one on the Nasdaq.
About 8.7 billion shares traded on the New York Stock
Exchange, the American Stock Exchange and Nasdaq, below last
year's estimated daily average of 9.65 billion.
(Reporting by Rodrigo Campos; Editing by Kenneth Barry)
