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By Rodrigo Campos
February 1, 2012 2:00 PM EST
Stocks extended January's rally, climbing more than 1 percent on Wednesday after upbeat global manufacturing data and as Greece neared a long-delayed deal with private creditors.
An index of the U.S. manufacturing sector rose in January to its highest level since June, an industry group said, while China's factory sector expanded slightly, confounding expectations for a contraction. Germany recorded its first rise in manufacturing output in four months.
The equity gains, led by industrials, financials and basic materials, have come mostly from an improvement in manufacturing data around the world, according to Peter Boockvar, equity strategist at Miller Tabak in New York.
"They're buying things that are the most cyclical," he said, referring to sectors that thrive during economic expansions.
Stocks also got a boost after Greek Finance Minister Evangelos Venizelos said talks between Athens and its private creditors were "one formal step away" from a deal needed to avoid a messy default.
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U.S. and European banks rallied on the news. Bank of America
Homebuilder shares advanced after U.S. data showed construction spending surged in December to its highest level in more than 1-1/2 years. An index of housing stocks <.HGX> rose 1.9 percent.
The Dow Jones industrial average <.DJI> gained 138.42 points, or 1.10 percent, to 12,771.33. The S&P 500 Index <.INX> gained 16.88 points, or 1.29 percent, to 1,329.29. The Nasdaq Composite <.IXIC> gained 40.22 points, or 1.43 percent, to 2,854.06.
After the S&P 500 rose 4.4 percent last month, some strategists see the benchmark approaching a short-term top. The index could be "near the upper end of a trading band," with a top around 1,350, according to John Manley, chief equity strategist at Wells Fargo Funds Management in New York.
"I'd rather own stocks than not, but on a year horizon," he said, indicating equities could pull back in the near term.
Amazon
According to Thomson Reuters data, with 228 companies having
reported results, 61 percent have beaten expectations - below the 70 percent beat rate of recent quarters.
Whirlpool
Facebook was expected to submit paperwork to regulators for a $5 billion initial public offering and selected Morgan Stanley
Morgan Stanley shares gained 6.1 percent to $19.78.
(Reporting by Rodrigo Campos, additional reporting by Chuck Mikolajczak; editing by Kenneth Barry)
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