Stocks rose on Wednesday on strength in financials, putting the S&P 500 on the path for a fifth-straight session of gains and lifting it to levels not seen since before Lehman Brothers Holdings' bankruptcy.

The recent rise in financial stocks has bolstered the market's rally after the sector had lagged previously. Bank of America Corp rose 3.5 percent to $13.44 and JPMorgan Chase & Co climbed 3.4 percent to $42.41, giving the greatest boost to the Dow industrials.

The advance by banks is some year-end rotation, portfolio repositioning at year-end -- they have been lagging the last four months, said Fred Dickson, chief market strategist at D.A. Davidson & Co in Lake Oswego, Oregon.

Money managers, closing their books for the year, took advantage of price declines in bank stocks, as well as other categories, such as homebuilders.

The KBW regional bank index <.KRX> rose 4 percent and is now up nearly 20 percent for the month.

Index component Whitney Holding Corp surged 30.1 percent to $14.14 after it agreed to be acquired by Hancock Holding Co in a stock deal worth about $1.5 billion.

Hancock shares slipped 5.7 percent to $34.93.

Investors seem to be reacting to the fact that, at least at the regional level, banks have been able to improve their balance sheets, Dickson said.

The Dow Jones industrial average <.DJI> gained 13.47 points, or 0.12 percent, to 11,546.63. The Standard & Poor's 500 Index <.SPX> gained 3.52 points, or 0.28 percent, to 1,258.12. The Nasdaq Composite Index <.IXIC> gained 4.12 points, or 0.15 percent, to 2,671.73.

The S&P 500 climbed above 1,255.08, a level last seen in September 2008 before investment bank Lehman collapsed and an important psychological barrier.

Energy shares rose as crude oil futures hit a two-year high, approaching $91 a barrel. Chevron Corp added 0.8 percent to $89.91, while Exxon Mobil Corp edged up 0.1 percent to $72.77.

High levels of bullishness and the S&P 500 relative strength index are among indicators pointing to an overbought condition, but that may only be worked off after traders return in January from the holidays.

Walgreen Co rose after the drugstore chain posted higher profit on increased prescription sales and a slower pace of store openings that helped control costs. Its shares rose 7 percent, the second-largest gain on the S&P 500, to $39.45.

Nike Inc on Tuesday posted an 11 percent rise in future orders, a key measure of sales growth, but that missed Wall Street's estimates and sent shares of the world's largest athletic shoe and clothing maker down 5.8 percent to $86.91.

Economic data showed sales of previously owned U.S. homes rose in November, the National Association of Realtors said, while the Commerce Department revised gross domestic product growth up to an annualized rate of 2.6 percent from 2.5 percent.

(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)