U.S. stocks pared gains on Wednesday as a pullback in financial shares offset positive broker comments on bellwethers McDonald's and Procter & Gamble.
The KBW bank index <.BKX> fell 1.7 percent. Goldman Sachs Group Inc
The Dow Jones industrial average <.DJI> added 22.86 points, or 0.27 percent, to 8,497.71. The Standard & Poor's 500 Index <.SPX> gained 5.17 points, or 0.57 percent, to 913.30. The Nasdaq Composite Index <.IXIC> rose 14.11 points, or 0.81 percent, to 1,748.65.
Analysts said the recent sharp rally in stocks from bear market lows in March could have more to go if investors who missed the run-up jump in.
There is a lot of money on the sidelines and that has a lot to do with it, a lot of people that are latecomers to this rally, said Carl Birkelbach, chairman and chief executive of Birkelbach Investment Securities in Chicago.
This is not a done deal yet, and investors are starting to treat it like a done deal. There is still some pain to go through, said Birkelbach.
Shares of Deere & Co
Energy shares advanced as U.S. crude oil futures rose above $61 a barrel to touch a new six-month high amid bullish inventory data and a spate of U.S. refinery accidents. The PHLX Oil Service Sector index <.OSX> gained 3.2 percent.
U.S. Treasury Secretary Timothy Geithner said the Obama administration was making headway in settling down financial markets and said a program to cleanse so-called toxic assets from bank balance sheets will begin over the next six weeks.
The S&P 500 is up nearly 36 percent from the 12-year low on March 9 as investors become increasingly optimistic that the economy and financial system are stabilizing. Analysts cautioned that the positive sentiment will only be sustained once they see firmly improving data.
Minutes from the U.S. Federal Reserve's policy-setting meeting are to be released at 2:00 p.m. EDT (1800 GMT). Investors will watch for more clues on the economy.
No. 2 U.S. discount retailer Target Corp
Rival Wal-Mart Stores Inc
In contrast, Hewlett-Packard Co
(Reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)