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The markets tacked on solid gains on Wednesday, helped by financial, energy and technology shares, on stronger-than-expected quarterly results from investment banking titan Goldman Sachs and encouraging developments from the IMF.
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The Dow Jones Industrial Average gained 96.9 points, or 0.78%, to 12579, the S&P 500 rose 14.4 points, or 1.1%, to 1308 and the Nasdaq Composite rose 41.6 points, or 1.5%, to 2770.
Wall Street has had a strong start to the year. The Dow, S&P 500 and Nasdaq all closed at their highest values since July on Thursday.
Goldman Sachs (NYSE:GS) saw its shares surge 6.8% after it posted a quarterly profit that came in ahead of expectations. The investment banking giant earned $1.84 a share on $6.1 billion in revenue. Analysts expected the New York-based firm to earn $1.24 on sales of $6.5 billion.
Other financials also got a strong tailwind from the earnings report. Indeed, JPMorgan Chase (NYSE:JPM) and Bank of America (NYSE:BAC), America's two biggest banks by assets, both leaped than 4% on the day.
Energy companies like Halliburton (NYSE:HAL) and Schlumberger (NYSE:SLB) posted solid gains as well. Technology players like Amazon.com (NASDAQ:AMZN) and Netflix (NASDAQ:NFLX) helped push the Nasdaq higher by 1.1% on the day.
Traders have also been keeping a close eye on developments from Europe, where the debt crisis is still posing a serious threat to many world economies. The International Monetary Fund said Wednesday it needs to raise its firepower by roughly $1 trillion in coming years, and plans to raise its lending capacity by $500 billion. However, the IMF said it is "exploring options on funding and will have no further comment until the necessary consultations with the Fund’s membership have been completed."
Also on the European front, the Greek government is still struggling to hash out a deal with creditors on the size of private-sector losses on its debt. The talks, which are resuming on Wednesday, fell through last week. If a deal can't be struck, it may lead to a Greek debt default when the country's next major payment comes due in March, analysts have said.
The euro jumped 0.94% to $1.2856, while the U.S. dollar slipped 0.74% against six world currencies.
Market participants also got a fresh read on wholesale inflation and industrial production on the day.
The Producer Price Index fell 0.1% in December from November, compared with expectations of a 0.1% gain. Excluding the more volatile food and energy components, core prices were up 0.3% on the month, a bigger increase than the 0.1% economists forecast. Inflation at the producer level has jumped 4.8% from the year prior, or 3% on the core level.
The more closely-watched report on consumer prices is on tap for Thursday. Meanwhile, industrial production was up 0.4% in December from the month prior, slightly weaker than the 0.5% gain economists were looking for.
Commodities were mixed. The benchmark crude oil contract traded in New York dipped 12 cents, or 0.12%, to $100.59 a barrel. Wholesale RBOB gasoline jumped 2% to $2.825 a gallon.
In metals, gold gained $4.30, or 0.26%, to $1,658 a troy ounce.
European blue chips fell 0.25%, the English FTSE 100 rose 0.15% to 5,702 and the German DAX climbed 0.34% to 6,355.
In Asia, the Japanese Nikkei rallied 0.99% to 8,551 and the Chinese Hang Seng climbed 0.3% to 19,687.