U.S. stocks rose on Wednesday as a renewed promise of extended low interest rates from the Federal Reserve and its relatively positive view of the U.S. economy enticed investors into risky assets.
Government data released before the session showed a steeper-than-expected decline in February producer prices, pointing to scant inflation pressure and further supporting the ultra-low interest rates that have fueled a rally in equities.
The Dow industrials rose on Tuesday for a sixth straight day while the S&P 500 and the Nasdaq Composite hit fresh multi-month highs.
The PPI number supports the Fed's position to keep rates low, and the markets are encouraged by the Fed being comfortably on the sidelines for the near-term, said Alan Gayle, senior investment strategist at RidgeWorth Investments in Richmond, Virginia.
Coal miner Massey Energy Co
April crude oil futures rose 0.7 percent to $82.27 following the release of inventory data.
The Dow Jones industrial average <.DJI> gained 38.02 points, or 0.36 percent, to 10,724.30. The Standard & Poor's 500 Index <.SPX> rose 5.40 points, or 0.47 percent, to 1,164.86. The Nasdaq Composite Index <.IXIC> added 12.15 points, or 0.51 percent, to 2,390.19.
Investors expect the S&P 500 to rise 10 percent during 2010, according to a quarterly Reuters poll published Wednesday.
Hartford Financial Services Group Inc
Federal Reserve Chairman Ben Bernanke will defend the central bank's role in supervising smaller banks, which it would lose in regulatory reform proposals, in a 2 p.m. (1800 GMT) hearing before the House of Representatives Financial Services Committee.