Stocks Build on Their Gains

Updated from 2:01 p.m. EDT

U.S. stocks were marking substantial gains Wednesday as an encouraging report on durable goods orders helped quell fears of a backsliding economy even as oil prices ticked higher.

The Dow Jones Industrial Average was climbing 107 points to 11,520, while the S&P 500 was gaining 12 points to 1283. The Nasdaq rose 30 points to 2392.

Traders appeared to take heart from the Census Bureau's read on durable goods. The agency said orders rose 1.3% in July, well ahead of economists' forecasts for zero growth. Excluding transportation-related products, the figure increased 0.7%, whereas analysts were expecting a 0.7% decline.

"Durable goods orders increased more than expected in July, but the increase may have more to do with special factors than any improvement in underlying trends in the economy," wrote Tony Crescenzi, chief bond market strategist at Miller Tabak and contributor to TheStreet.com's sister site, RealMoney.com. Crescenzi wrote that the boost in goods orders factors in price increases in primary metals, an increase not reflected in the Census Bureau's data.

Furthermore, Crescenzi wrote, the Economic Stimulus Act of 2008 was probably responsible for an increase of about $1.4 billion in machinery orders, as the law gave companies additional depreciation on equipment bought in 2008 and increased small businesses' expensing limits. Crescenzi also noted that capital expenditures may be a sign that businesses are trying to improve efficiency and thus rein in costs.

In the previous trading session, stocks traded in choppy fashion to rise in the final hour and close Tuesday narrowly mixed. The Federal Deposit Insurance Corp. reported Tuesday that the banks and thrifts it insures recorded markedly low earnings in the most recent quarter and the number of banks on its so-called problem list jumped 30%.