A report released Thursday revealed the U.S. economy grew at a 3.5 percent pace in the third quarter, the best showing in two years, fueled by government-supported spending on cars and homes. It's the strongest signal yet that the recession is over and the economy has entered a new, albeit tentative, phase of recovery.

The Dow Jones industrial average rose nearly 2 percent.

Meanwhile, oil prices rose sharply. Benchmark crude for December delivery rose $2.61 to $80.07 a barrel on the New York Mercantile Exchange.

Also Thursday, the International Air Transport Association called overall air traffic "fragile but improving" as passenger demand edged up 3 percent in September compared with the same month last year. But the trade group stopped short of saying demand would keep chugging higher anytime soon.

"It is far too early to call this a recovery," IATA's Director General and CEO, Giovanni Bisignani, said in a statement. "The worst may be over in terms of the fall in demand, but yields continue to be a disaster and costs are rising. The airline industry remains firmly in the red with a fragile business environment."

Shares of United parent UAL Corp. led the pack in late trading, gaining about 5 percent to reach $6.64. The only airline falling in the afternoon was AirTran Holdings, which gave up a penny to hit $4.39.

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