"It's the best of all worlds for the stock market, not for the economy and not for every American, but for the stock market," Springer said.
Oil and resource-related stocks mostly advanced after oil prices crossed $90 a barrel as government data indicated oil stockpiles fell 5.3 million barrels, which was more than expected. The data confirmed industry reports as cold gripped the U.S. and Europe. Gasoline inventories, however, rose, which kept prices in check.
Devon Energy , Diamond Offshore and Marathon Oil , led the energy sector higher.
Constellation Energy gained after Citigroup raised the stock to "buy" from "hold."
Among bank stocks, which were mostly higher, Bank of New York Mellon and State Street Bank got a lift from Raymond James, which began coverage of both banks. The brokerage rated Bank of New York a "strong buy" and set a $40 a share price target, while it rated State Street "outperform" and gave it a $58 a share price target.
And Northern Trust rose after Raymond James raised its price target on the bank to $68 from $62.
Whitney Holding surged more than 30 percent after the bank agreed to be acquired by HancockHolding in a stock deal worth about $1.5 billion.
While 2010 has been a year for the regional banks, Jeffery Harte, managing director in equity research at Sandler O’Neill, told CNBC that 2011 will be best for the large financials.
“You’ve got markets generally rotating into equities and what could give some of the big banks an edge is people looking at [taking on] more risk,” Harte said, listing Citigroup , Bank of America , Goldman Sachs and Northern Trust among his top picks.
On the tech front, Microsoft advanced on media reports it is developing a new version of its widely used Windows operating system that targets low-power devices such as tablets. News that the tech giant may pursue a strategy that relies less on Intel chips sent shares of the chip maker lower.
Semiconductor stocks were mostly lower Wednesday, including Taiwan Semiconductor , AMD , and Texas Instruments .
And Verizon Wireless gained after the telecom giant's COO said it will distribute a smartphone made by Motorola to run on its new 4G network, according to the Wall Street Journal.
Also, Motorola rose after the cell phone maker said it bought Zecter, a startup whose technology allows for the wireless streaming of digital media such as music and photos. The company hopes this technology will enhance the software that Motorola already develops for smartphones and other mobile gadgets.
Activision climbed after news "Call of Duty: Black Ops" crossed the $1 billion mark. The gaming company, meanwhile, is seeking $400 million damages from rival Electronic Arts in a lawsuit related to "Call of Duty," according to court filings. Activision already had a case against two former employees who developed the "Call of Duty" video game franchise, and now have an independent company developing games for EA.
Nike tumbled after the sports apparel retailer reported better-than-expected earnings but disappointing future orders. Analysts had expected orders—a key measure of sales growth—to exceed the 11 percent reported by Nike. Meanwhile, at least two brokerages raised their price targets on the firm.
Walgreen jumped after the drugstore chain reported better-than-expected profitsfor its fiscal first quarter thanks to higher margins. In addition, S&P Equity raised its price target on the firm to $45 from $38.
American Greetings soared after reporting a surprising profit gain thanks to higher margins and strong international sales. Revenue for the greeting card company fell in North America, however.
Office Depot spiked more than 7 percent to the top of the S&P 500 after news the office retailer is a prime takeover candidate, according to Morningstar. (Read more: Is Office Depot the Next Takeover Target?)
and Micron were expected to report earnings after the bell.
Footlocker fell despite FBR's decision to add the athletic footwear retailer to its top picks list. The company, however, is trading near its 52-week high.
Aeropostale shares slipped after the teen apparel retailer named a new CFO, the latest change in the ranks of its top management.
Gold prices were up slightly near $1,387 an ounce, as other metals weakened slightly. Copper was lower as the London Metal Exchange said a single trader owned up to 90 percentof the metal in its wearehouses, which, according to the Wall Street Journal, is equal to about 50 percent of the global registered copper stockpile.
Elsewhere, existing home sales for November rose 5.6 percentto a seaonally adjusted annual unit rate of 4.68 million units in November, after falling 2.2 percent in October, the National Association of Realtors reported. The rate was less than expected by economists surveyed by Reuters, who expected sales to rise to a 4.71 million unit pace.
Meanwhile, prices of existing homes rose 0.7 percent in October.
And mortgage applications fell to the lowest level in nearly a yearas refinancings tumbled in the wake of rising interest rates, the Mortgage Bankers Association said Wednesday.
Homebuilding stocks were mostly higher across the board: Pulte Group, Toll Brothers , Lennar , and KB Homes rose, while Hovnanian slipped.
Investors will keep an eye on geopolitical developments afterSouth Korea announced land and sea military exercises including its largest-ever live-fire drill near North Korea just as tensions on the peninsula were beginning to ease.
European stocks edged higher in quiet trading, extending a December rally. European stocks have also returned to pre-Lehman bankruptcy levels.
The stock market will be open for a full session on Thursday, while the bond market is scheduled to close early. Markets will be closed on Friday in observance of Christmas.
On the Calendar This Week:
WEDNESDAY: Earnings from Bed, Bath & Beyond, Micron
THURSDAY: NYSE early close; durable goods orders, personal income and spending, weekly jobless claims, consumer sentiment, new home sales
FRIDAY: Markets closed for Christmas
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