Stocks rose as HSBC Holdings' agreement to buy Household International sparked a rally in financial shares. Intel boosted computer-related shares after saying it will buy back almost $9 billion in stock.
The Dow Jones industrial average rose 143.64, or 1.7 percent, to 8542.13, and the Nasdaq Stock Market composite index rose 50.18, or 3.7 percent, to 1411.52.
The Standard & Poor's 500-stock index climbed 21.74, or 2.5 percent, to 904.27.
Stocks were also helped by government reports showing that retail sales excluding automobiles had their biggest advance in six months in October and that the number of U.S. workers filing new claims for state unemployment benefits fell for a second week.
Household International climbed $5.04, to $27.50.
Other consumer lenders gained. American Express, the fourth-biggest U.S. credit card issuer, climbed $1.75, to $36.95. Providian Financial rose 51 cents, to $4.98, and Capital One Financial rose $1.84, to $30. MBNA rose 94 cents, to $21.29.
U.S. shares of HSBC, which agreed to pay $14.2 billion in stock for Household, fell $1.85, to $54.20.
Intel rose $1.09, to $19.21. The chipmaker said it will buy back as many as 480 million shares, or 7.2 percent of its average shares outstanding in the third quarter.
Dell Computer rose 89 cents, to $30.94. After markets closed, the computer maker reported a third-quarter profit of 21 cents a share, meeting the average estimate of analysts surveyed by Thomson First Call. In extended trading, the shares fell to $30.12.
Target gained $3.46, to $33.49. The No. 2 U.S. discount retailer said third-quarter profit jumped 50 percent as it boosted full-price sales and increased revenue from its credit card operations.
Kohl's rose $2.81, to $63.71. After exchanges closed, the low-price department-store chain reported earnings of 39 cents a share, topping forecasts by 2 cents.
Charles Schwab rose $1.34, to $10.97. The brokerage said its accountholders had their best month in almost a year in October.
Defense stocks again fell as talk of war subsided. Lockheed Martin, the world's largest defense contractor, shed $2.70, to $50.53. Northrop Grumman declined $2.77, to $90.50. General Dynamics dropped $1.29, to $77.70.
* The New York Stock Exchange composite index rose 9.80, to 478.70; the American Stock Exchange index rose 8.62, to 819.09; and the Russell 2000 index of smaller-company stocks rose 10.13, to 386.24.
* Advancing issues outnumbered declining ones by more than 2 to 1 on the NYSE, where trading volume rose to 1.52 billion shares, from 1.46 billion on Wednesday. On the Nasdaq, advancers outnumbered decliners by 8 to 3 and volume totaled 1.71 billion, down from 1.85 billion.
* The price of the Treasury's 10-year note fell $10.81 per $1,000 invested, and its yield rose to 4.06 percent, from 3.84 percent on Wednesday.
* The dollar rose against the Japanese yen and the euro. In late New York trading, a dollar bought 120.35 yen, up from 120.25 late Wednesday, and a euro bought $1.0055, down from $1.0067.
* Light, sweet crude oil for December delivery settled at $25.29 a barrel, up 10 cents, on the New York Mercantile Exchange.
* Gold for current delivery fell to $317.90 a troy ounce, from $318.70 on Wednesday, on the New York Mercantile Exchange's Commodity Exchange.