By Avantika Chilkoti and Michael Wursthorn 

U.S. stocks rose Thursday, stoked by solid earnings reports from Netflix, Morgan Stanley and others, as well as a preliminary Brexit deal that has the potential to remove a major obstacle facing investors.

More than a tenth of the companies in the S&P 500 have reported results so far and numbers are mostly coming in ahead of analysts' expectations. That gave the stock market some support a day after weak retail sales data raised concerns that a major component of the economy, American consumers, were slowing their spending.

"We're seeing some encouraging news come through earnings," said David Page, head of macroeconomic research at AXA Investment Managers. "It's been more encouraging than the bleak assessments the market was originally making."

Investor sentiment in the U.S. and Europe also got a boost after U.K. and European Union negotiators agreed to new terms for a Brexit deal. However, mounting concerns about U.K. lawmakers' support for the accord tempered the market's reaction and led to some reversals.

Shares of health-care providers also resumed their rally after The Wall Street Journal reported Tuesday that several of them, including McKesson and Cardinal Health, would pay $18 billion to settle opioid litigation.

That combination pushed up two-thirds of the stocks in the S&P 500, which advanced 8.26 points, or 0.3%, to 2997.95 on Thursday. The broad index is now within 1% of its July 26 record.

The Nasdaq Composite also rose, adding 32.67 points, or 0.4% to 8156.85. The Dow Jones Industrial Average, meanwhile, hung onto a small gain, rising 23.90 points, or 0.1%, to 27025.88 despite a pullback in shares of International Business Machines. The Dow component weighed on the blue-chip index after reporting lackluster earnings a day earlier.

Among the biggest gainers, shares of Netflix climbed $7.07, or 2.5%, to $293.35 after rising more than 6% earlier in the session. The online video-streaming service posted solid earnings late Wednesday and expanded its subscriber base domestically and abroad, although growth fell short of its own target.

Morgan Stanley added 65 cents, or 1.5%, to $43.44 after it handily topped analysts' profit forecasts.

Dover also notched a big gain, rising $5.56, or 5.8%, to $101.38 after the industrial conglomerate raised the low end of its guidance and reported better-than-expected quarterly profits and revenue.

Meanwhile, Cardinal Health added $2.14, or 4.4%, to $51.21, while McKesson shares rose $5.67, or 3.9%, to $150.51 amid a broader rally of health-provider stocks. They are up 9.1% and 12%, respectively, for the week.

Of the 64 companies in the S&P 500 to post results through Thursday morning, 52 have topped estimates, according to FactSet. Companies have a lower bar to beat, however, after analysts cut profit estimates in recent months. They lowered expectations across all 11 sectors of the S&P 500 to account for waning global growth and the U.S.'s prolonged trade fight with China.

The companies in the index are still on track to report a 4.7% decline in profits from a year earlier, the biggest profit pullback of the year, according to FactSet.

In Europe, assets ranging from the British pound and the euro to European stocks initially surged on the draft Brexit deal. But most of those assets gave up their gains following signs the deal will face some opposition in the U.K. Parliament.

The pound fluctuated between gains and losses against the dollar and was recently up 0.3%. The U.K.'s FTSE 250 index, a gauge that includes local companies with significant domestic operations, pared back gains to 0.2%. The broader Stoxx 600 closed down 0.1%.

"There is still a huge amount of uncertainty; there is the question of whether the prime minister can get any deal through Parliament," said William Dinning, head of investment strategy and communications at Waverton Investment Management.

Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com and Michael Wursthorn at Michael.Wursthorn@wsj.com

(END) Dow Jones Newswires

October 17, 2019 17:01 ET (21:01 GMT)