Stocks put in another strong showing on Wednesday as investors seemed to put aside concerns over geopolitical fears to send stocks higher, although volumes remain thin.
The Dow Jones Industrial Average gained more than 85 points after closing higher in the previous sessiondespite significant global headwinds and mixed economic news. The blue-chip is nearing a 2-1/2 year high (the Dow closed at 12,391 on Feb. 18).
AT&T , Exxon Mobil , and Merck and led the Dow higher, while Cisco slipped.
The S&P 500 and the Nasdaq also gained‘. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell below 18.
All key S&P 500 sectors advanced, led by telecom, utilities and consumer discretionary.
Todays' move higher is "part of the continuing movement out of fixed income and into the equity markets," said Bernard McSherry, senior vice president at Cuttone.
The fact volume has been light for several sessions, though, worries McSherry, who said you want investors "to really buy into" a rally. Only 616 million shares changed hands on the New York Stock Exchange floor in the final hour of trading.
At current levels, the market is on track to post the best quarter since 1998. That's in the face of unrest and uncertainty around the globe, from fighting in Libya, to protests in the Middle East, to the repercussions from the disaster in Japan.
One reason for the U.S. market's resilience is investors have few other places to invest, Yu-Dee Chang, chief trader at principal at ACE Investment Strategists told CNBC.com.
"There’s a lot of concerns everywhere, but there is no yield anywhere," Chang said. "So everyone is forced back in the market."
Among U.S. stocks, Chang likes big, dividend-paying companies, but he's also making a bet on financials, which had largely slumped since announcing dividend increases and stock buybacks after receiving approvals from the Federal Reserve. Analysts had anticipated the payouts to shareholders, and the stocks sold off on the news.
"We like to buy on dips," Chang said, adding that he likes large-cap financials, and the Financial Select SPRD Fund, which was up more than 1 percent.
Chang also likes gold, and gold-related stocks and ETFs, as he believes precious metals are benefiting from the current instability in the world. But if stability returns, the economy will revive, and so will inflation, also making gold a smart investment. Gold closed above $1,423 an ounce.