NEW YORK (MarketWatch) — U.S. stocks rose Wednesday, sending the S&P 500 Index to a close above 1,300 for the first time since July 28, on improved sentiment in housing and as Goldman Sachs Group Inc.’s earnings beat expectations.
“We started off on a positive footing because certain financial earnings weren’t as bad as investors had feared, but most of the uptick came from home-builders’ confidence reaching a level not seen since 2007,” said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.
Newmark: Curb your enthusiasm
Mean Street host Evan Newmark urges bankers and traders on Wall Street to lower their expectations when it comes to earnings and prosperity. (Photo: AP)
“Now we have two areas, jobs and housing, which are critical foundations, and both are seeing signs of improvement. Plus, the euro /quotes/zigman/4867933/sampled EURUSD +0.01% is back above $1.28 — if you’re going to use a barometer for progress in the EU, the euro is as good as any,” Ablin added.
The Dow Jones Industrial Average /quotes/zigman/627449 DJIA +0.78% rose 96.88 points, or 0.8%, to 12,578.95.
The S&P 500 /quotes/zigman/3870025 SPX +1.11% added 14.37 points, or 1.1%, to 1,308.04, with the technology sector, and chip manufacturers in particular, gaining after circuit maker Linear Technology Corp. /quotes/zigman/74810/quotes/nls/lltc LLTC -0.06% said it expects revenue to rise as much as 8% in its third quarter. Read more on Linear Tech’s results leading rally in chip stocks.
Web portal Yahoo Inc. /quotes/zigman/59898/quotes/nls/yhoo YHOO -0.38% 3.2% rose on news that co-founder Jerry Yang is severing all ties to the company he co-founded. Read more about Yahoo.
Microsoft Corp. /quotes/zigman/20493/quotes/nls/msft MSFT +0.32% , International Business Machines Corp. /quotes/zigman/230066/quotes/nls/ibm IBM +0.59% , Intel Corp. /quotes/zigman/20392/quotes/nls/intc INTC +0.12% and General Electric Co. /quotes/zigman/227468/quotes/nls/ge GE +0.05% are among the heavyweights still on tap to report this week, and results from any “could give the market a lift or dampen it,” according to Fred Dickson, chief investment strategist at Davidson Cos. in Lake Oswego, Ore.
The Nasdaq Composite Index /quotes/zigman/123127 COMP +1.53% climbed 41.63 points, or 1.5%, to 2,769.71.
For every stock losing ground about four gained, with less than 800 million shares trading hands on the New York Stock Exchange. NYSE composite volume was about 4 billion.
Building blocks
Investor sentiment and the euro /quotes/zigman/4867933/sampled EURUSD +0.01% were bolstered by reports the Greek government might reach a deal with its private creditors over a debt swap in coming days. Also, the International Monetary Fund is proposing hiking its lending capability by as much as $500 billion. Read more on the IMF and also read WSJ article on Greek debt talks resuming.
Goldman Sachs /quotes/zigman/188479/quotes/nls/gs GS +0.18% shares jumped 6.8% after the investment bank reported results that beat Wall Street’s expectations, while Bank of New York Mellon Corp. /quotes/zigman/445224/quotes/nls/bk BK -0.05% shares slid after its earnings fell 26% Read analysis of Goldman earnings.
“Goldman Sachs broke a trend” of earnings disappointments from the banking sector, said Dickson.
Stock-index futures had retained modest gains after the government reported wholesale prices unexpectedly fell last month, data supportive of the Federal Reserve’s benign view on inflation. Read more on wholesale prices.
A measure of builder confidence in the housing sector rose for a fourth consecutive month in January to hit its highest level since mid-2007, with builder-related shares including PulteGroup Inc. /quotes/zigman/129784/quotes/nls/phm PHM -0.38% and Lennar Corp. /quotes/zigman/232035/quotes/nls/len LEN +0.22% advancing more than 4%. Read more on home builders.
Separately, figures from the Federal Reserve had U.S. industrial production rebounding last month, climbing 0.4% after a revised 0.3% drop in November. Read more on industrial output.
“Investors are weighing a combination of some reasonable economic data, and data we saw from overseas looked OK, so no bad European news,” remarked Davidson’s Dickson.
Add EURUSD to portfolio 
Kate Gibson is a reporter for MarketWatch, based in New York.
Nice to see some good news
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