By Laura Mandaro, MarketWatch SAN FRANCISCO (MarketWatch) — U.S. stocks started higher Monday after better Chinese manufacturing data, comments from European officials suggesting progress toward a broad debt plan, and strong Caterpillar quarterly results. The Dow Jones Industrial Average DJIA +0.63% rose 43.3 points, or 0.4%, to 11,853.4. The S&P 500 SPX +0.87% gained 4 points, or 0.4%, to 1,243. The Nasdaq Composite COMP +1.29% added 17 points, or 0.7%, to 2,655. Ahead of the opening bell, HSBC said its preliminary monthly survey of manufacturing conditions in China climbed to a five-month high in October. The so-called flash PMI showed the sector in expansion versus its contraction in September. Read more on China flash PMI. On Sunday, European leaders meeting in Brussels said they were making progress toward a broad plan to deal with the euro zone’s debt crisis, including recapitalizing European banks, but left the details for a second summit scheduled for Wednesday. Read more on EU summit. “Equity traders have come back from the weekend in a cautiously optimistic mood,” wrote analyst Colin Cieszynski, analyst at CMC Markets Canada. “EU debt negotiations didn’t go off the rails over the weekend, and it appears that some progress may have even been made toward an agreement.” Stocks have been highly sensitive to indications that European policy makers would come up with measures to prevent a sovereign debt default from triggering a Lehman Bros.–style financial shock, including by pumping more money into the region’s banks. Markets, particularly commodities, have also been on edge about whether inflation-fighting efforts in China could lead to a hard landing in that economy, spurring a global slowdown. Leading Dow gainers, shares of Caterpillar Inc. CAT +4.60% advanced 5.3% after the equipment maker reported a jump in earnings, topping estimates, and guided analysts to the top of its range for full-year earnings per share. Laura Mandaro is a MarketWatch editor, based in San Francisco.

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