Bank and technology shares lifted Wall Street on Wednesday on hopes the sectors may be poised for a recovery as the U.S. economy improves.
The market got extra support from data showing U.S. wholesale inventories fell unexpectedly in January and sales hit their highest in more than a year.
The inventories data point to the fact that the economy is improving, said Angel Mata, managing director of listed equity trading at Stifel Nicolaus in Baltimore. There's demand out there and (businesses) are going to have to build up those inventories.
A more upbeat view of the economy helped lift bank stocks, with Citigroup Inc up 3.4 percent to $3.95 and JPMorgan Chase up 1.7 percent to $43.12. The KBW bank index <.BKX> rose 2.5 percent and earlier hit its highest intraday level since November 2008.
Most of the economic news has been positive, and the natural conclusion investors are making is, if the economy is turning, financials are poised to do well, Mata said.
The Dow Jones industrial average <.DJI> added 19.28 points, or 0.18 percent, to 10,583.66. The Standard & Poor's 500 Index <.SPX> rose 6.56 points, or 0.58 percent, to 1,147.01. The Nasdaq Composite Index <.IXIC> gained 18.49 points, or 0.79 percent, to 2,359.17.
The benchmark S&P 500 Index extended its year-long advance, up 69 percent after Tuesday's anniversary of a plunge to more than a 12-year closing low.
Technology shares continued an uptrend in which the Nasdaq Composite has risen in eight of the past 10 sessions, with the declines smaller than 0.1 percent.
There's a refilling cycle in technology and Cisco announced (Tuesday) a game changer that spills over to other technology companies, Stifel's Mata said.
Cisco Systems Inc's new router, introduced Tuesday, is a bet on surging Web traffic driven by smart phones like Apple Inc's iPhone and services like Google Inc's YouTube.
Apple shares rose 0.8 percent to $224.82 while Google added 2.1 percent to $571.99.
In deal news, Abbott Laboratories agreed to buy Facet Biotech Corp for $27 a share late Tuesday, topping a failed bid from Biogen Idec Inc .
Abbott stock rose 0.6 percent to $55.12 on the New York Stock Exchange, while Facet surged 66.6 percent to $27 on the Nasdaq.
Shares of Chevron , the second-largest U.S. oil company, dropped 0.7 percent to $73.75 and capped gains in the Dow industrials.
(Editing by Kenneth Barry)