Stocks closed with broad gains and the Dow ended at another record high, buoyed by sharp gains in financial and telecom stocks.
"With strong earnings and reasonable valuations you should expect stocks to go higher," said Edward Keon, chief investment strategist at Prudential. "I think the market represents good value. There's always some reason to worry things get worse, but so far those worries have turned out to be unproven."
The Dow Jones Industrial Average continued its ascent into record territory, hitting a new intraday high of 13,256. The Nasdaq saw broad gains while the S&P 500 traded within a point of the 1500 level, less than 2% below the closing record of 1527.
Verizon Communications led daily gains among Dow components, and shares of the telecom giant rose more than 3% after rival Sprint Nextel reported first-quarter earnings below Wall Street forecasts.
Sprint, the third-largest U.S. wireless service provider, reported a first-quarter loss of $211 million, or 7 cents a share. Excluding charges, earnings came in at 18 cents a share, compared with Wall Street's earnings forecast of 22 cents. The stock ended higher despite the shortfall.
Financial stocks rose after MasterCard, the world's number two credit card company, said its first-quarter profit growth surged to a record high of 70%. MasterCard attributed the strong performance to foreign currency benefits and strong overseas growth. Shares of American Express also gained.
Buying was across the board on Wednesday with all 10 S&P 500 sectors trading higher. Advancing shares outpaced decliners on the New York Stock Exchange by four to one.
"I think its about new leadership and new investors in this rally," said Jeffrey Kleintop, chief market strategist for LPL Financial Services. "Only in the last week have we seen inflows to U.S. equity mutual funds turn positive, meaning the individual investor is finally coming back into this market, not surprisingly at a psychological milestone like Dow 13,000."
But some market pros expressed caution as the major indexes continue to advance into uncharted territory. The Dow has ended higher in 21 of the last 24 sessions.
"It's a melt-up," Jeffrey Saut, chief investment strategist for Raymond James, told CNBC.com. "We are 23 days into a buying stampede, but they typically don't last more than 25 to 27 sessions."
Cablevision Systems shares jumped 9% after the company's board agreed to be taken private following a sweetened buyout offer from the Dolan family, CNBC's David Faber reported. The Dolans, which own a majority stake in the cable services firm and operator of Madison Square Garden, raised its bid 20% to $36.26 a share.
The controlling family of Dow Jones are likely to decline a $5 billion takeover bid from media mogul Rupert Murdoch and News Corp. but traders are debating a potential increased bid from Murdoch or another bidder.
In other earnings news, Time Warner said first-quarter net profit fell from the same quarter last year Wednesday but revenue climbed. Excluding one-time items, the company reported a profit of 22 cents a share, compared with analysts' estimate of 20 cents.
Nortel Networks jumped after the company issued first-quarter revenue guidance above Wall Street estimates and maintained its full-year revenue forecast.
Merger news continued to capture investor attention as earnings season winds to a close.
New York light sweet crude futures fell 1.1%, closing at $63.68 a barrel, after weekly crude inventories data indicated stockpiles rose 1.1 million barrels. Crude declined for the third straight session and is down four out of the last five.
In economic news, monthly factory orders rose 3.1%, topping economists' March estimate of 2.2% and provided further evidence of the end of a manufacturing slump. The ADP Employment Index fell short of forecasts, however, as private non-farm jobs rose 64,000 jobs, well short of the consensus forecast of 180,000.
Europe, Asia Close Higher
European stock markets closed higher Wednesday, with media stocks the biggest gainers. Meanwhile, Asian equities ended modestly higher as the U.S. dollar jumped to a two-month high against the yen.
The London FTSE-100,the Paris CAC-40 and the Frankfurt DAX all finished higher.
Shares of U.K. broadcaster BSkyB gained 5% in early trading after the Rupert Murdoch-controlled company said nine-month revenue rose 10% with an unexpected rise in third-quarter subscribers.
Lord John Browne resigned as chief executive of integrated oil giant BP as a British court lifted an injunction preventing a newspaper group from publishing details about his private life. Browne will be succeeded by Tony Hayward, the heir apparent to Browne prior to the scandal.
Credit Suisse Group posted a first-quarter results above expectations. Europe's ninth-largest bank said strong investment banking revenue helped boost the bottom line by 5%.
Tokyo's Nikkei 225 Average closed higher with Sony and other exporters stronger as the dollar extended its gains against the yen. Air-conditioner maker Daikin Industries advanced on earnings hopes, while a positive outlook by Promise helped other consumer lending firms. Japanese markets will be closed Thursday and Friday for holidays.
South Korea's Kospi Index posted its first gain in three sessions as exporters such as Hyundai Motor advanced on data showing faster-than-expected export growth, while stocks sensitive to fuel costs gained on lower oil prices.
Hong Kong stocks were slightly higher, boosted by Wall Street gains, and as HSBC Holdings advanced after a Dubai-based firm said it had bought a large stake in Europe's biggest bank. But Hong Kong-listed mainland firms declined 0.5%, led by Chinese lenders and insurers, even as mainland financial markets were closed for a week-long public holiday.