U.S. stocks advanced on Wednesday, with Wall Street's volatility unabated, as investors largely adopted the view that the European Central Bank would implement a large-scale bond-purchasing program.
UnitedHealth Group rose after posting a better-than-expected fourth-quarter profit; International Business Machines fell after the Dow component offered a tepid outlook; Netflix gained after the supplier of streaming videos reported earnings that beat estimates.
Multiple news outlets quoted sources in reporting the ECB's executive board had proposed monthly bond purchases of roughly 50 billion euros in a quantitative easing program that would last at least a year.
"That gets you to 600 billion euros, which is north of expectations, so if in fact the source is credible that's enough to have markets reacting positively; buy the rumor and sell the news," Art Hogan, chief market strategist at Wunderlich Securities, said.
"Germany is saying we don't want anything to do with this, so the tightrope that Mario Draghi is walking here is to do something large and still placate Germany," Hogan said of the ECB president.
The CBOE Volatility Index, a measure of investor uncertainty, fell 5.2 percent to 18.85.
Ahead of Wednesday's open, stock futures maintained losses after data showing U.S. housing starts climbed more than expected in December in a hopeful sign for the sluggish housing-market recovery.
Major U.S. Indexes
After sliding 119 points and rising 84, the Dow Jones Industrial Average ended at 17,554.28, up 39.05 points, or 0.2 percent. UnitedHealth led blue-chip gains and IBM blue-chip losses.
The added 9.57 points, or 0.5 percent, to 2,032.12, with energy the best performing and all 10 of its major industry groups advancing.
The Nasdaq gained 12.58 points, or 0.3 percent, to 4,667.42.
For every five shares falling, roughly nine rose on the New York Stock Exchange, where 771 million shares traded. Composite volume surpassed 3.7 billion.
Crude-oil futures for March delivery rose $1.41, or 2.8 percent, to $47.78 a barrel on the New York Mercantile Exchange. Gold futures for February briefly rose above $1,300 an ounce, before closing down 50 cents at $1,293.70 an ounce.
The U.S. dollar fell against the currencies of major trading partners and the yield on the 10-year Treasury note rose 8 basis points to 1.8703 percent.
On Tuesday, U.S. stocks ended higher after switching direction multiple times during the session, as investors tracked the price of oil and fourth-quarter earnings from corporations including Johnson & Johnson.
Read More Stocks land in positive terrain as volatility reigns
Coming Up This Week:
Thursday:
8:30 a.m.: Jobless claims for week ending Jan. 17
9: a.m.: FHFA home-price index for November
9:45 a.m.: Markit PMI flash for January
Friday:
8:30 a.m.: Chicago Fed national activity index for December
10 a.m. Existing-home sales for December
10 a.m. Leading indicators for December
More From CNBC.com: