U.S. stocks rose on Wednesday on optimism the International Monetary Fund wants to raise more money to help combat Europe's debt crisis and after Goldman Sachs' earnings beat estimates.
The IMF is seeking to boost its war chest by $600 billion to help countries reeling from the crisis, but some nations insist Europe must first do more to support ailing members, sources said.
Meanwhile, Greece and its creditors resumed negotiations on terms of a planned debt swap, hoping to overcome an impasse in talks and stave off a painful default.
It's too early to get excited about Europe, but the IMF news is clearly a positive and a sign Europe is on its way to stabilizing, said Jerome Heppelmann, chief investment officer at Old Mutual Focused Fund in Berwyn, Pennsylvania.
Goldman Sachs Group Inc
Goldman climbed 6.4 percent to $103.93, helping to boost the financial sector after discouraging results from Citigroup Inc
The S&P financial index <.GSPF> was up 1.1 percent Wednesday and nearly 6 percent for the year.
The Dow Jones industrial average <.DJI> put on 68.23 points, or 0.55 percent, at 12,550.30. The Standard & Poor's 500 Index <.SPX> was up 9.29 points, or 0.72 percent, at 1,302.96. The Nasdaq Composite Index <.IXIC> jumped 28.47 points, or 1.04 percent, at 2,756.55.
The S&P 500 has risen 3.3 percent so far this year, helped by gains in financials. Investors have focused on improving U.S. economic data and a stabilization of the euro zone crisis.
The benchmark S&P 500 again bumped against the 1,300 level, a key resistance point that analysts said could trigger more selling if it is convincingly pierced.
Bank of New York Mellon Corp
Another big custody bank, State Street Corp
Financial results will remain in focus, with reports from Bank of America Corp
Other big-cap names that should offer clues this week into the state of the economy include Microsoft Corp
Amid a flurry of economic data, U.S. industrial output rose in December as manufacturing rebounded at its strongest pace in a year, while inflation pressures remained in check, with wholesale prices slipping last month.
Also, U.S. homebuilder sentiment unexpectedly jumped in January to its highest level in 4-1/2 years. The PHLX housing index <.HGX> climbed 2.6 percent.
(Reporting By Ryan Vlastelica; editing by Jeffrey Benkoe)