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U.S. stocks surged Thursday as investors bet that Ireland would receive a rescue package and eagerly watched General Motors climb on its return to the Big Board.




The Dow Jones Industrial Average rose 180 points, or 1.6%, to 11187 in midmorning trade. Alcoa led the blue-chip index's gains, jumping 4.6%, while American Express rose 2.5% and Caterpillar added 2.4%.



The Standard & Poor's 500-share index gained 1.7% to 1198, but struggled to squeeze above the technically and psychologically significant 1200 level. The materials, energy and industrials sectors led the broad index's gains. The technology-heavy Nasdaq Composite jumped 1.8% to 2520.



General Motors shares, trading under the ticker symbol "GM," were recently up 7.2% at $35.38, vanquishing any fears that the shares had been priced too high.



"The GM IPO is a feather in the government's cap," said Todd Colvin, vice president at MF Global. "There's a bit of elation out there surrounding the stock. But now we're at a realization stage: can the auto maker sell cars and turn a profit? Those have to be the two questions on every investor's mind right now."



Traders said Thursday's offering elicited an unusual flurry of excitement on the New York Stock Exchange. Still, questions remain regarding GM's long-term strategy.



"Celebrating an IPO doesn't mean the business model works," said Bob Froehlich, senior managing director at The Harford. "It just means you have enough investors that are willing to give the business model a chance. But now GM still has to go out and execute their plan."


Developments abroad also contributed to the market's early gains. Ireland's central bank governor said negotiations with officials from the European Union, European Central Bank and the International Monetary Fund will likely lead to Ireland receiving a loan on the order of "tens of billions" of euros from its European Union counterparts. The officials are currently in Dublin to examine the country's finances and banks.



The euro recently rose to $1.3619, up from $1.3515 late Wednesday in New York. The U.S. Dollar Index, which tracks the U.S. currency against a basket of six others, fell 0.3%.



On the economic front, initial unemployment claims rose a smaller-than-expected 2,000 to 439,000 in the week ended Nov. 13. Additionally, mid-Atlantic area manufacturers saw a hot November, turning in their best gain in activity since last December. The Federal Reserve Bank of Philadelphia said its November index of general business activity came in at 22.5 from 1.0 in October. It had been expected at 4.5.



Among stocks in focus, Sears Holdings dropped 6% after its fiscal third-quarter loss widened more than analysts expected as margins fell and sales dropped, especially at the company's namesake stores.



Food company J.M. Smucker's fiscal second-quarter earnings climbed 6.9% on higher margins and topped analysts' expectations, but revenue was surprisingly flat. Smucker also raised its target for the year by five cents. Smucker shares fell 3.2%.



Office-products retailer Staples' fiscal third-quarter profit rose 7.2% as sales and margins showed modest improvement. Shares rose 3.4%.



Dollar Tree's fiscal third-quarter earnings rose 37% as the discount retailer reported stronger-than-expected sales growth. The company narrowed its profit target for the year and boosted revenue expectations, while anticipating same-store sales up by the low- to mid-single digits on a percentage basis. Shares rose 1.4%.



In deal activity, Cardinal Health said it will buy privately held pharmaceutical distributor Kinray for $1.3 billion. Cardinal Health, the second-biggest drug distributor in the U.S. by market value, is looking to boost its presence in smaller pharmacies in the northeastern U.S. its shares jumped 5.2%.



Demand for Treasurys declined, pushing yield on the 10-year note up to 2.94%. Crude-oil prices advanced, while gold futures also rose