Stocks jumped on Thursday as companies across a wide swath of the economy reported strong earnings and existing home sales fell less sharply than forecast, easing fears of a double-dip recession.

Caterpillar Inc gained 2.1 percent to $68.33 after reporting a better-than-expected profit and raising its outlook, citing strong growth in emerging markets.

Profit jumped 43 percent at diversified manufacturer 3M Co on strong demand in emerging markets. The stock rose 3 percent to $84.74 and was the top boost on the Dow.

Package deliverer United Parcel Service Inc , considered an economic bellwether, advanced 6.5 percent to $63.93 after its profit rose sharply and it raised its full-year outlook.

Wall Street, which opened up more than 1 percent, extended gains after an industry group said U.S. existing home sales fell to a three-month low in June, but the supply of unsold homes rose to the highest level in almost a year.

Home sales data was great. On an absolute basis, it's (bad), but, man, it is in the right direction and certainly crunched consensus, and that is great news, said Burt White, managing director and chief investment officer at LPL Financial in Boston.

You've got a bunch of great earnings reports, revenues are hanging in there pretty well, and other than the Bernanke bummer yesterday, the mood is definitely looking up.

The Dow Jones industrial average <.DJI> gained 215.92 points, or 2.13 percent, to 10,336.45. The Standard & Poor's 500 Index <.SPX> climbed 25.32 points, or 2.37 percent, to 1,094.91. The Nasdaq Composite Index <.IXIC> rose 58.10 points, or 2.66 percent, to 2,245.43.

The Dow Jones Transportation Average <.DJT> rose 4.3 percent, helped by UPS as well as Union Pacific Corp up 5 percent to $72.63. The No. 1 U.S. railroad's results topped expectations.

The PHLX Housing Sector index <.HGX> surged 4.3 percent on the housing data, with Lennar Corp rising 5.4 percent to $15.09.

Earlier Thursday, data showed weekly jobless claims rose by 37,000 to 464,000, worse than the forecast of 445,000, although continuing claims were lower than expected.

(Reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)