Stocks finished higher for the fourth-consecutive session Wednesday, with the S&P 500 within striking distance of the 1,500 level and the Dow Jones closing at its best level in five years, lifted by a batch of stronger-than-expected earnings.
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The Dow Jones Industrial Average climbed 67.12 points, or 0.49 percent, to close at 13,779.33, led by IBM and Disney.
The Dow is up more than 5 percent so far this month, on pace for the best January performance since 1997 when the index rose 5.7 percent. The index is also within 3 percent of its all-time closing high of 14,164.53 hit on October 9, 2007. (Read More: The Great Rotation: A Flight to Equities in 2013)
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, finished above 12.
Among key S&P sectors, techs rallied, while materials and energy closed lower.
"Trees don't grow to the sky—There will be a consolidation, pullback or correction," wrote Elliot Spar, market strategist at Stifel Nicolaus. "The first target on the S&P on the downside will be the last breakout at 1,474, then 1,450 and 1,427."
Among tech earnings, Google rallied after the search-engine giant posted earnings that topped expectations. At least 12 brokerages raised their price target on the company. IBM also gained after the technology services company reported quarterly results that exceeded projections, thanks to growth in emerging markets. SocGen lifted its rating on the company to "hold" from "sell" and boosted its price target on to $201 from $188. BMO also increased its price target on the firm.
Also among earnings, United Technologies edged higher after the conglomerate also beat expectations, even though profit actually declined. Fellow Dow component McDonald's climbed after the fast-food giant topped earnings and revenue expectations, but warned that it sees sales lower early in the first quarter. (Read More: Complete Earnings Coverage)
Advanced Micro Devices surged to lead the S&P 500 gainers after the chipmaker reported a narrower-than-expected loss and revenue that beat estimates.
Meanwhile, Coach plunged more than 16 percent after the leather-goods retailer reported holiday quarter sales below Wall Street estimates as a tough economy and stiff competition in the women's handbags segment hurt sales in North America.
Investors will be closely watching iPhone maker Apple's quarterly results after the closing bell. Shares of the tech giant have tumbled nearly 30 percent from their all-time high of $705 a share last September. Analysts expect Apple to earn $13.47 a share on revenue of $54.73 billion. (Read More: Apple Earnings Need to Overcome Technical Malaise)
"Expectations are already built—if Apple comes in as expected, I think we'll see the market bounce," said Adam Hewison, president of INO. "But the trend is technically and fundamentally down for Apple—there's still room for the stock to go lower."
Meanwhile, the bill to extend the debt limit to May 19 received enough votes to pass the House of Representatives. The House passed the measure by a 285-144 vote, a bipartisan showing on an initiative brought by majority Republicans.
On the economic front, mortgage applications gained for the third-straight week, thanks to an increased demand for refinancings, according to the Mortgage Bankers Association.
In Europe, tech and healthcare stocks were among the gainers after SAP issued guidance for 2013 operating profit that beat market expectations and Swiss drug maker Novartis said it expects sales growth to pick up in 2014.
—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)
Coming Up This Week:
THURSDAY: Jobless claims, PMI manufacturing index flash, leading indicators, oil inventories, Fed balance sheet/money supply; Earnings from 3M, Bristol-Myers, Nokia, Xerox, AT&T, Microsoft, E-Trade, Juniper Networks, Starbucks
FRIDAY: New home sales, Geithner's last day as Treasury Secretary, House recess until Feb. 4; Earnings from P&G, Halliburton, Honeywell, Kimberly-Clark
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