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Wall Street’s Santa Claus rally gained steam on Wednesday as the markets rallied for the fourth day in a row and the Nasdaq Composite hit another 15-month high even though new data revealed a surprise collapse in new home sales last month.

Today’s Markets

The Dow Jones Industrial Average rose 1.51 points, or 0.01%, to 10466.44, the Standard & Poor's 500 added 2.57 points, or 0.23%, to 1120.59 and the Nasdaq Composite picked up 16.97 points, or 0.75%, to 2269.64. The FOX 50 gained 0.31 points, or 0.04%, to 816.35.

While the markets extended their 2009 surge on Wednesday, it's worth noting the latest gains came on extremely low volume due to the holiday-shortened week and the Dow barely eked out a gain.

Still, Wall Street proved to be resilient in the face of the unexpected plunge in new home sales and mixed economic indicators on the state of the U.S. consumer. Instead, the markets benefited from a big day for tech stocks and strong gains for commodity-related stocks amid oil's best day in more than a month. 

“It looks like a strong finish for the year. That is quite frankly very encouraging,” said Peter Kenny, managing director of Knight Capital Group.

Most of the Dow's 30 components ended in the green, led by Alcoa (AA) and DuPont (DD), which benefited from a wave of buying in the basic materials sector. On the other hand, Merck (MRK) slumped more than 1% and Home Depot (HD) was hurt by the housing news. 

As has been the case for much of this month, the Nasdaq Composite posted much stronger gains than the broader markets, ending at its best level since Sept. 19, 2008. Tech stocks like eBay (EBAY) and Amazon.com (AMZN) rallied after a string of better-than-expected results from companies like business software maker Red Hat (RHT).

The latest rally left the major indexes up for the fourth day in a row and landed the S&P 500 at its highest level since Oct. 1, 2008 and 65.6% above its bear-market low set in March. It shouldn't come as a shock to see the markets rally this week as the Dow has gained an average of 0.65% during the week of Christmas since 1950, compared to an average weekly return of just 0.15% over that span, according to Schaeffer's Investment Research. 

Stocks were briefly spooked after the Commerce Department said new home sales tumbled 11.3% last month, surprising analysts who had expected an increase of 2.3% and marking the steepest drop in 10 months. At the same time, the government sharply lowered its estimate for October new home sales, further casting doubt on the strength of the housing recovery. 

The ugly new home sales report comes a day after an industry group said existing home sales, which account for the majority of transactions, took their biggest jump in nearly three months. Home builders like KB Home (KBH) and Hovnanian (HOV), which rallied around Tuesday's data, closed mixed.

But the losses were limited by the commodities complex, which benefited from a bullish oil inventory report and a 0.55% decline for the greenback versus the euro. The government said U.S. crude stockpiles plunged by nearly 5 million barrels last week, sending crude oil to its best one-day rally in over a month. Crude closed up $2.27 a barrel, or 3.05%, to $76.67 -- a three-week high. 

Basic materials stocks like Barrick Gold (ABX) and Freeport McMoRan (FCX) also climbed as gold gained $7.30 a troy ounce, or 0.67%, to $1093.30.

Meanwhile, tech stocks were boosted by better-than-expected earnings reports released after Tuesday's closing bell from networking equipment maker 3Com (COMS), chip maker Micron Technology (MU) and Red Hat.

Due to Christmas, the stock markets are scheduled to shut down early on Thursday and stay closed until Monday.  

Data Dump

Wall Street received mostly benign news on the state of the U.S. consumer earlier in the day as the Commerce Department said personal spending rose 0.5% in November, slightly lower than forecasts for a 0.6% rise. Personal income increased by 0.4% last month, also slightly lower than estimates but the largest gain in six months. While slightly weaker-than-expected, the results still signal a slow recovery.

Also, the University of Michigan said its final December consumer sentiment survey jumped to a 72.5 reading from 67.4 in November. Wall Street had been expecting a slightly stronger reading of 73.5.

Corporate Movers

Citigroup (C) completed its $20 billion repayment of TARP investments and terminated a loss-sharing agreement with the government, freeing the bank from the Treasury's exec compensation rules. The banking giant said the U.S. canceled $1.8 billion of its $7.1 billion of trust preferred securities. The government also still holds warrants to buy Citi’s stock.

Wells Fargo (WFC) repaid its $25 billion in TARP cash and paid out $131.9 million in accrued dividends. The U.S. still holds warrants to purchase about 110 million shares of Wells at $34.01 per share.

Google (GOOG) said the Federal Trade Commission has asked the search giant for more information about its $750 million proposal to buy mobile advertising company AdMob, The Wall Street Journal reported. The request suggests the deal could be delayed, the paper reported.

Research in Motion (RIMM) acknowledged its second glitch on its BlackBerry network in less than a week, saying subscribers in the Americas likely had their messages delayed. However, RIM said it may have found the root cause of the problem and encouraged subscribers to download a new version of its BlackBerry Messenger service to resolve the issue. 

Bristol-Myers Squibb (BMY) downgraded its 2009 earnings forecast due to higher licensing payments and funding to its foundation and the spin-off of Mead Johnson (MJN). BMY forecasted non-GAAP EPS of $1.75 to $1.80, which would widely miss consensus calls for EPS of $2.02.

Carter’s (CRI) announced the results of an independent investigation that concluded the children’s clothing company needs to cut its earnings for a five-and-a-half year period by 3% amid irregularities and inaccuracies in its sales organization’s disclosures. The company also announced the creation of two new execs to head up each of its brands and the exit of Joseph Pacifico, who had served as president.  

Global Markets

London's FTSE 100 rose 0.82% to 5372.38, Germany's DAX gained 0.20% to 5957.44 and France's CAC 40 advanced 0.32% to 3910.75.

In Asia, Hong Kong's Hang Seng jumped 1.12% to 21328.74, China's Shanghai Composite climbed 0.76% to 3073.78 and Japan's Nikkei 225 was closed for a holiday.