Stocks closed modestly higher Wednesday, but off the session highs, as investors continued to show wariness about the health of the U.S. economy.
The Dow Jones Industrial Averagerose 46.32 points, or 0.5 percent, to close at 10,387.01.
JP Morgan , AIG , and Alcoa led blue-chips higher. Hewlett-Packard and Intel fell.
The S&P 500 rose 7.03 points, or 0.6 percent, to close at 1,098.87. The Nasdaq rose 19.98 points, or 0.9 percent, to close at 2,228.87. TheCBOE Volatility Index, widely considered the best gauge of fear in the market, fell below 24.
Most key S&P sectors ended higher, led by financials, industrials and energy. Utilities stocks slipped.
Stocks gave up some gains after the text of President Obama's speechon business tax breaks was made available and before the Federal Reserve's "beige book" survey of 12 regional banks showed a "deceleration" in economic growth across the country.
While higher, stocks remain within a trading range that reflects the fact the Fed's report didn't offer a definitive difference in the economic outlook, said Doug Roberts, chief investment strategist at ChannelCapitalResearch.com.
"You don’t have a catalyst to the upside, and you don’t have a catalyst to the downside," Roberts said.
The S&P 500, for instance, is trading about in the middle of a 12 percent range that has existed for the past four months, driven mainly by program trading and short-term traders reacting to news events, Roberts said.
"We’re locked in this trading range," he said. "You’re bouncing off the walls on each end. Sometimes you bounce off a piece of furniture, but you make no progress getting out of the room."
Financials recovered from Tuesday's losses following a bounce in European bank shares. Bank ofAmerica and Goldman Sachs rose.
Meanwhile, Goldman is reportedly facing a big fineby from the U.K.'s Financial Services Authority, according to the Financial Times.
Also, the firm is in talks with at least five potential hirersfor traders at its U.S. proprietary trading group, according to sources.
Tech stocks were mostly higher across the board, but PC and semiconductor stocks remained under pressure following several downgrades.
Among the downgrades, UBS cut Intel to "neutral" from "buy," citing weak demand for PCs and expected price cuts in the fourth quarter. The brokerage also lowered its price target for Intel to $19.50 per share from $28.
UBS also reportedly cut HP to "neutral" from "buy."
On Tuesday, HP sued former CEO Mark Hurdand asked a court to block him from joining rival Oracle , saying his hiring by the tech firm puts HP's trade secrets "in peril."
Oracle said it plans to pay Hurd a base salary of $950,000 a yearin addition to a $10 million fiscal 2011 bonus.
Meanwhile, UBS reiterated its buy rating for Apple , and raised its price target for the tech giant's stock to $350 per share from $340, citing strong demand for the firm's iPad and iPhone4.
Google shares rose after the search-engine giant announced a new search feature called "Google Instant,"which places a premium on getting results to users at a quicker rate.
And Altera increased its guidance for third-quarter revenue growth. Jefferies cut its price target on the chipmaker to $26 from $32.
In the energy sector, BP rose after Fitch raised its ratings on the oil company. In addition, BP released an internal reporton the Deepwater Horizon blast in April that blamed Transocean for missing danger signs and Halliburton for cementing the well improperly.
Oil rose above $74 a barrelamida weaker dollarand a raised forecast for global oil demand growth from the government helped lift crude futures.
Oil giants Chevron , ConocoPhilips and ExxonMobil were trading higher. Meanwhile, brokerage Benchmark cut its price target on Chevron to $94 from $98, raised its price target on ConocoPhillips to $48 from $43, and increased ExxonMobil to $52 from $48.