Stocks rose for second day Wednesday after Deere blew past earnings expectations and a report showed a rebound in housing starts.
The Dow Jones Industrial Average added another 30 points after logging its best day in three monthson Tuesday.
Home Depot , Bank of America and Caterpillar led the Dow at the open; Kraftwas at the bottom of the pack.
The market has been alternating between gains and losses for the past eight sessions. But a late rally Tuesday added to already strong gains and gave the Dow and the S&P their biggest one-day advances since Nov. 9.
Deere shares soared this morning after the world's largest maker of tractors and harvesters blew past expectations, helped by wider margins at its farm-equipment and finance units.
Earnings from Martha Stewart and Whole Foods offered some encouragement on the consumer front.
Martha Stewart swung to a profit, helped by stronger revenue at its broadcasting, digital and merchandising divisions. Total revenue jumped 20 percent, though a big chunk of that was deferred Kmart royalties.
Organic-foods chain Whole Foods beat earnings expectations and raised its outlook after the bell Tuesday.
But Campbell's Soup cut its sales forecast for 2010, projecting a 2.5 to 3.5 percent gain against a previous forecast of 4 to 5 percent.
And Humana announced plans to slash 1,400 jobs, or about 5 percent of its workforce, as health-care membership has taken a hit from high unemployment.
Some M&A news this morning: Walgreen plans to buy rival drugstore chain Duane Readefor $1.08 billion. The Reade chain is ubiquitous through New York City and will maintain its name.
Meanwhile, AIG's sale to MetLife is likely to be delayed because of a tax dispute that likely will require an Internal Revenue Service ruling, the Wal Street Journal reported.
In economic news, housing starts rose 2.8 percent in January, better than expected, though building permits, a gauge of future building activity, fell 4.9 percent. And mortgage applications fell 2.1 percent last week even as mortgage rates neared a record low.
Separate reports showed industrial production rose 0.9 percentin January, better than expected, and import prices jumped 1.4 percent last month. Exports gained 0.8 percent.
Still to come: The Federal Reserve will release the minutes from its last meeting and Philadelphia Fed President Plosser will speak.
After the bell, earnings are due from Hewlett-Packard , Analog Devices and Nvidia .
Aaron Rakers said he expects "positive" results from HP tonight amid healthy consumer demand for PCs following the release of Windows 7. He's got a "buy" rating and $62 price target on the stock, which is currently around $50. (Watch the video of Rakers' comments on CNBC.)
Discovery Communications shares got a boost from index buying as the stock is replacing Pepsi Bottling on the S&P 500. Pepsi Bottling is being acquired by PepsiCo.
Investors will also watch for movement in stocks of companies mentioned in quarterly filings by the likes of Warren Buffett, George Soros, and others. Buffett's Berkshire Hathaway has trimmed its holdings in Johnson and Johnson, Procter & Gamble, ConocoPhillips, and ExxonMobil, while adding to stakes in Becton Dickenson and Wells Fargo.
Soros increased his holdings of SPDR Gold Trust and also lifted its stake in Monsanto and bought Citigroup shares.
Still to Come:
WEDNESDAY: Fed's Plosser speaks; Fed minutes; Earnings from HP, ADI, Nvidia, Priceline
THURSDAY: PPI; weekly jobless claims; leading indicators; Philly Fed; weekly crude inventories; Fed's Duke, Lockhart & Bullard speak; Earnings from Wal-Mart, DirecTV, CBS and Dell
FRIDAY: CPI; Earnings from JCPenney
Send comments to firstname.lastname@example.org.