Stocks Rally Amid Upbeat Economic Data

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The markets pushed deep into positive territory on Wednesday as traders reacted to a round of upbeat data on the U.S. economy and kept paying close attention to Europe.

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Today's Markets

As of 3:20 p.m. ET, the Dow Jones Industrial Average jumped 105 points, or 0.84%, to 12639, the S&P 500 gained 12.7 points, or 0.96%, to 1333 and the Nasdaq Composite climbed 22.7 points, or 0.8%, to 2877.

The Commerce Department reported orders for durable goods in May rose 1.1%, beating expectations of a rise of 0.4%. The report is a lagging indicator, but it includes a large swath of U.S. manufacturing, from refrigerators to airplanes.

Pending sales of existing U.S. homes jumped 5.9% in May from the month before, according to the National Association of Relators. That easily beats expectations of a 1% increase. The index is now up 13.3% from the same month in 2011. This is the third-straight report on the housing market released this week that came in ahead of analysts' expectations.

Trading desks have also been fixated on the eurozone debt crisis, watching news break from across the 17-member currency bloc endlessly.

The Eurogroup, which is a collection of the bloc's finance ministers, formally accepted Spain's and Cyprus' application to receive aid from the European Financial Stability Fund and the European Stability Mechanism when it becomes active. The group said it expects Spain to need between 51 and 62 billion euros in rescue funds to recapitalize its banks.

Separately, International Monetary Fund Managing Director Christine Lagarde said in a statement that the institution stands "ready to join the efforts of our European partners to help Cyprus return to stable and sustainable economic growth and restore a solid financial sector." Largarde said she expects to send a team to the Mediterranean island nation as soon as possible.

Italy, which is the bloc's third-biggest economy, was forced to pay the highest rate to borrow for six months since December at an auction on Wednesday. This comes on the heels of a downgrade on Tuesday by Egan-Jones of Germany's credit rating, both somber reminders that the crisis has moved from the periphery to Europe's core.

European Union leaders are set to meet on Thursday and Friday to discuss the potential of creating a banking union that may help instill confidence in European banks. There has also been talk for months of a tighter fiscal union. However, all of these measures require wide-ranging approval, which has been particularly difficult to garner from Germany -- the eurozone's paymaster.

"A few brave souls have edged into the market this morning, but enthusiasm is distinctly lacking, as most traders opt to hold their ground and wait to see what decisions, if any, emerge from the eurozone summit this week," Chris Beauchamp a market analyst at IG Index in London wrote in an e-mail.

In corporate news, Qatar's sovereign wealth fund is pushing commodities trader Glencore to sweeten its $26 billion bid for miner Xstrata, threatening to scuttle the big merger at the last minute. The fund has reportedly become Xstrata's second-biggest shareholder, meaning its seal of approval will likely be necessary to close the deal.

Oil futures followed equities higher despite a slightly smaller-than-expected build in U.S. inventories. The benchmark contract jumped 87 cents, or 1.1%, to $80.21 a barrel. Gasoline prices took a hit after U.S. stocks jumped by nearly three times more than analysts anticipated. Wholesale New York Harbor gasoline fell 0.93% to $2.62 a gallon.

In metals, gold rose $3.50, or 0.22%, to $1,578 a troy ounce.

Foreign Markets

The Euro Stoxx 50 rallied 1.8% to 2133, the English FTSE 100 gained 1.4% to 5424 and the German DAX tacked on 1.5% to 6229.

In Asia, the Japanese Nikkei 225 jumped 0.77% to 8730 and the Chinese Hang Seng rallied 1% to 19177.