Stocks closed near highs of the session Wednesday with the S&P finishing at its highest level since July 2011, buoyed by an optimistic report on Greece, which added fuel to an earlier rally after a better-than-expected housing market report.
The Dow Jones Industrial Average rose 96.88 points, or 0.78 percent to close at 12,578.95, led by BofA and JPMorgan .
The S&P 500 rallied 14.37 points, or 1.11 percent to finish at 1,308.04, above the psychologically-important 1,300 mark for the first time since July 28, 2011. The Nasdaq jumped 41.63 points, or 1.53 percent to end at 2,769.71.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, tumbled below 21.
Most S&P sectors ended higher, led by techs and bankswhile utilities lagged.
Stocks added to gains after a report that the debt-ridden nation may reach an agreement with its private creditors by the end of the week.
“Still, there’s a sense of skepticism,” said Todd Schoenberger, managing director at LandColt Trading. “We’ve seen similar problems in the past…[Greece] has their back against the goal line and [the creditors] with the ball are about to run it in.”
Schoenberger noted that Greece has until mid-March to seek a solution or face an inevitable default.
- Can Greece Default on Its Debt Without Tanking Markets?
“The question remains that even if they have a deal in place, we’ll have to examine the details,” Schoenberger added.
Among earnings, Goldman Sachs posted earnings that fell, but still beat Wall Street estimates, sending shares of the investment bank higher.
Within regionals, Bank of NY Mellon fell after the bank posted earnings that fell 26 percent due to lower forex volume and restructuring charges. Fellow regional bank PNC Financial also logged lower profit, but said it continued to improve credit quality as it set aside less money for bad loans. Meanwhile, US Bancorp edged higher after the company said its net income jumped almost 40 percent as it profited from its core businesses.
Meanwhile,KBW and Nomura cut their price targets on Citigroup to $42 from $44 and to $34 from $36, respectively. This comes a day after Citi posted earnings well short of estimates both on profit and revenue. But shares of the investment bank rebounded to finish higher.
And Wells Fargo gained after at least five brokerages raised their price targets on the bank a day after it turned in earnings that topped Wall Street estimates.
So far, 49 percent of companies that have reported earnings so far have reported above estimates while 29 percent have missed, according to Thomson Reuters.
On the economic front, the National Association of Home Builders/Wells Fargo builder sentiment index climbed to hit its highest level since June 2007. Homebuilders such as Hovnanian and Pulte jumped following the report.
“The housing market is getting quite close to a bottom,” said Kevin Brungardt, Chairman of Roundpoint Financial. “We’ll hit our bottom in housing prices in somewhere between the fourth quarter 2012 and second quarter of 2013.”
European shares shaved their lossesto end mixed following successful Germanand Portuguese debt auctionsand after a report that the IMF may be considering an increase to its lending capacity.
“Fundamentally, Europe is still broken and still needs a lot of help to correct itself so that will continue to weigh on the world economy, it may continue to have a suppression effect on the U.S. and limit our progress,” said Brungardt.
Yahoo rallied after co-founder Jerry Yang quit the companyin order to appease shareholders.
Also among techs, Apple edged higher after RBC raised its price target on the iPhone maker to $525 from $500.
Ebay is slated to post earnings after-the-bell.
Also on the economic front, producer prices slipped in December, according to the Labor Department. Meanwhile, industrial output advanced to its strongest pace in a year, but the reading was still slightly below expectations.
“It’s encouraging to see that inflation is not an immediate concern…that’s good for the economy," said Brungardt. "And manufacturing seems to support a gradual recovery as well.”
Meanwhile, weekly mortgage applications soared 20 percent last weekhelped by a surge in refinancing applications, according to the Mortgage Bankers association.
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On Tap This Week:
THURSDAY: CPI, housing starts, jobless claims, oil inventories; Earnings from BofA, Morgan Stanley, Sony Ericsson, UnitedHealth, AmEx, Google, IBM, Microsoft, Capital One
FRIDAY: Existing home sales; Earnings from GE, Schlumberger
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