U.S. stocks rose this week, almost wiping out the Dow Jones Industrial Average’s 2010 loss, after better-than-estimated earnings at companies from United Parcel Service Inc. to Apple Inc. and Ford Motor Co. lifted confidence the economy is recovering.

The S&P 500 gained 3.6 percent to 1,102.66 this week, erasing its 1.2 percent loss from July 12 to July 16. It has gained 7 percent since June 30 in its first monthly gain since April. The Dow climbed 326.72 points, or 3.2 percent, to 10,424.62, cutting its 2010 decline to less than 0.1 percent.  The Nasdaq gained 9 points or 4.15% and closed at 2,269.47 exactly at the same level of 31st December 2009 closing.

The S&P 500 has risen 7.8 percent from a 10-month low on July 2 on optimism about corporate profits. Of the 149 companies in the S&P 500 that reported earnings since July 12, about 85 percent have beaten the average analyst earnings forecast, according to Bloomberg data.

Takeovers have also lifted equities. U.S. companies have been the targets of $397 billion in announced takeover offers so far this year, 11 percent more than at the same time last year, according to data compiled by Bloomberg.

Since reaching a 19-month high of 1,217.28 in April, the S&P 500 has lost 9.4 percent, led by financial firms and energy producers. The gauge may rally to its June intra-day high of 1,131 if it breaks out of a so-called downtrend channel, according to technical analysis by BGC Partners Inc., which said the benchmark is “inching closer” to the breakout level.

Basic-materials makers and industrial companies gained this week on a report saying U.S. building permits rose in June for the first time since March. The S&P 500 Materials Index rose 7.1 percent to its highest weekly level in two months, with mining company Cliffs Natural Resources Inc. advancing 20 percent to $55.90.

S&P 500 industrial shares jumped 7.2 percent as a group during the week to the highest level since May. Boeing Co., the Chicago-based planemaker, surged 9.7 percent to $67.93 on orders worth $10 billion placed at the Farnborough Air Show near London.

All of the 10 industry groups in the S&P 500 advanced this week except a measure of health care stocks. Each gained at least 2.4 percent.