NEW YORK (CNN/Money) - U.S. stocks surged back to life Thursday morning after a pair of bullish forecasts from market heavyweight IBM and telecom leader Nokia switched the rally mode back on for stocks after a one-day pause.

Around 9:35 a.m. ET, the Dow Jones industrial average (up 241.98 to 8278.01, Charts) surged over 2.5 percent, while the Nasdaq Composite (up 49.25 to 1281.67, Charts) and Standard & Poor's 500 index (up 21.83 to 881.85, Charts) also soared.

GivenIBM (IBM: up $7.66 to $72.56, Research, Estimates)'s expansive footprint in techs and across the broader market, blue chips and techs felt a power surge straight off the block.

The PC maker Wednesday posted a third-quarter profit that beat Wall Street estimates by 3 cents a share as cost-cutting efforts and better performance in its information technology service business offset weakness in hardware and software revenue. IBM also said it was comfortable with its fourth-quarter forecast. Merrill Lynch upgraded the stock to "buy" from "neutral" but trimmed its 2003 estimate, citing weakness in services booking and light software revenue.

Cigarette maker Philip Morris (MO: up $1.42 to $40.02, Research, Estimates) injected more cheer for the blue chips. The company posted a third-quarter profit in line with estimates but reiterated its lowered guidance for 2002, citing increased competition from discount cigarette brands.

Nokia (NOK: up $1.34 to $16.34, Research, Estimates)'s positive results offered relief to a hard-hit telecom sector. The world's largest mobile phone maker on Thursday posted profits at the high end of market expectations as demand for its new phones countered weak markets. Nokia also reaffirmed its fourth-quarter profit forecast.

Microsoft (MSFT: up $2.08 to $52.49, Research, Estimates) turns in quarterly results after the close. The software maker is expected to log in a 43 cents-a -share profit, unchanged from the year-earlier period. Also due after the bell is No. 1 Unix server maker Sun Microsystems (SUNW: up $0.19 to $2.99, Research, Estimates)' results, expected to come in with a first-quarter loss of 4 cents a share compared with 5 cents a year earlier.

The Dow Jones industrial average began the day at 8,036.03 after losing nearly 220 points Wednesday. That's still about 750 points higher than a week ago, when a four-day rally was kicked off. The Nasdaq composite index is coming off a 50-point drop.

Investors largely brushed aside the morning's economic reports on weekly jobless claims, which came in higher-than-expected and the latest data on housing starts that showed a sharp surge in September.

Asian-Pacific stocks closed higher Thursday, with Japan's Nikkei index up 0.8 percent. European markets were boosted by IBM and Nokia's positive news.

Treasury prices fell in early trading, sending the 10-year note yield up to 4.17 percent from 4.02 percent late Wednesday. The dollar slipped against the yen, but was higher versus the euro.

Brent oil futures slipped 21 cents to $27.68 a barrel in London, where gold fell to its lowest level since early September.