Stocks edged higher on Wednesday as gains in financial stocks helped put the S&P 500 on pace for a fifth-straight winning session and lifted the benchmark index to levels not seen since before Lehman Brothers went bankrupt.

The recent rise in financial stocks has propped up the rally lately after the sector lagged through autumn. Bank of America Corp rose 2.4 percent to $13.29, and JPMorgan Chase & Co climbed 3 percent to $42.22.

It 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.

The KBW regional bank index <.KRX> rose 3.2 percent and is now up nearly 19 percent for the month. Index component Whitney Holding Corp surged 30.4 percent to $14.18 after it agreed to be acquired by Hancock Holding Co in a stock deal worth about $1.5 billion.

Hancock shares slipped 5.4 percent to $35.05.

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 9.27 points, or 0.08 percent, to 11,542.43. The Standard & Poor's 500 Index <.SPX> gained 2.52 points, or 0.20 percent, to 1,257.12. The Nasdaq Composite Index <.IXIC> gained 1.63 points, or 0.06 percent, to 2,669.24.

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

Energy shares rose as crude oil futures topped $90 a barrel. Chevron Corp added 0.7 percent to $89.82, while Exxon Mobil Corp climbed 0.1 percent to $72.79.

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

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 5.5 percent to $87.19.

Walgreen Co posted higher profit on increased prescription sales and a slower pace of store openings that helped control costs, sending its shares up 6.7 percent to $39.30.

U.S. economic growth was a touch stronger than previously estimated in the third quarter, but consumer spending was softer.

Data from the National Association of Realtors showed sales of previously owned homes rose less than expected in November, suggesting the U.S. housing sector is struggling to gain traction as high unemployment and tight lending standards continue to hamper recovery.

(Editing by Padraic Cassidy)