Stocks Get Sector Boost

NEW YORK (TheStreet) -- Stocks closed higher Wednesday as surging financial, chip and health care stocks outpaced the energy sector ahead of much anticipated earnings news.

The Dow Jones Industrial Average added 54 points or 0.5% at 10,681. The S&P 500 rose 9 points, or 0.8%, at 1146, and the Nasdaq went ahead by 26 points, or 1.1%, to 2308.

The Fed's beige book, which offered an anecdotal snapshot of economic activity around the country, painted a modestly improving picture. Stocks maintained the day's gains after the afternoon report showed 10 of the Fed's 12 districts reported better activity or improving conditions.

Eight districts gave that same appraisal in December's report. Most districts noted upticks in 2009 holiday sales "slightly greater" than 2008 and cited increasing home sales.

>>Top Blue-Chip Stocks Jump 59% in a Year

Still, the report counted a number of continuing headwinds. Labor conditions "remained generally weak," though certain locales showed some hiring. Most districts cited decreasing loan demand since December's report as credit quality deteriorated.

"I don't think you can ask for much more, and really not much more was expected," said Art Hogan, chief market strategist at Jefferies & Co. "We're concerned about China demand in general. But, really, the obvious driver for this week and next week is fourth quarter earnings."

Major earnings reports coming up are Intel(INTC) on Thursday and JPMorgan Chase(JPM) on Friday.

Separately, the U.S. Treasury budget deficit narrowed to $91.9 billion in December compared with a $120.3 billion deficit in the previous month. But that's far wider than the $51.75 billion imbalance from the year-ago period. The consensus forecast before the release called for a $92 billion deficit, according to figures provided by Briefing.com.