Stocks rose on Wednesday following factory and home sales data that may point to a healthier economy later in the year, boosting investor optimism.
Shares of big manufacturers Caterpillar Inc
Shares turned around following the manufacturing and homes data, with broad cross-sector buying benefiting shares of financial firms, homebuilders and natural resource companies.
In the financial sector, JPMorgan Chase
I would describe it (Wednesday's economic data) as pretty
consistent with our outlook that first-quarter GDP is going to be extremely negative, but we'll get improvement thereafter, said Keith Hembre, chief economist at First American Funds in Minneapolis.
If we haven't seen the maximum decline in production activity to date, we should probably see it reasonably soon and look for production numbers to get better.
The Dow Jones industrial average <.DJI> gained 78.53 points, or 1.03 percent, to 7,687.45. The Standard & Poor's 500 Index <.SPX> added 6.25 points, or 0.78 percent, to 804.12. The Nasdaq Composite Index <.IXIC> rose 9.55 points, or 0.62 percent, to 1,538.14.
On Tuesday, the S&P 500 ended its best month since October 2002 and has gained about 19 percent from 12-year lows hit in early March. The rally has been fueled mainly by hopes that the economy is showing signs of stabilization.
In the industrial sector, Caterpillar was up almost 4 percent at $29.01 and U.S. Steel was up 6.2 percent at $22.44.
Shares of homebuilders were among top gainers following the home sales data, with Centex Corp
But gains were kept in check by declines in the health-care sector after Celgene Corp
Celgene was the top drag on the Nasdaq, down 14.4 percent at $38.00. Earlier, Celgene hit a fresh 52-week low at $36.90. The S&P health-care index <.GSPA> fell nearly 1 percent; of the S&P's 10 sectors, this was the only sector in negative territory.
Shares of General Motors
Market watchers were also focused on the Group of 20 summit in London as leaders of the world's top economies meet to tackle the global economic crisis.
(Editing by Jan Paschal)