Stocks Finish With Solid Gains

NEW YORK (TheStreet) -- Stocks rose again Wednesday, buoyed by better-than-expected reports on durable goods orders and pending home sales. The advance came ahead of what's now expected to be an essentially fruitless eurozone summit on Thursday and Friday.

The Dow Jones Industrial Average jumped 92 points, or 0.74%, to close at 12,627. The blue-chip index has now risen in the past two sessions and clawed back the majority of the losses suffered on Monday.

The S&P 500 rose 12 points, or 0.90%, to finish at 1332. The Nasdaq climbed 21 points, or 0.74%, to settle at 2875.

The capital goods, energy and utilities sectors saw the strongest gains, while consumer cyclicals were the only group to tick lower.

Within the Dow, 24 of 30 components finished in positive territory, led by JPMorgan Chase (JPM), Bank of America (BAC), Alcoa (AA), and General Electric (GE).

Caterpillar (CAT), McDonald's (MCD), Home Depot (HD), and Cisco (CSCO) were the biggest losers among the blue chips.

Winners outpaced losers by a roughly 3-to-1 ratio on the New York Stock Exchange and nearly 2-to-1 ratio on the Nasdaq.

"We continue to believe that capital markets are simply too quiet for their own good and not accurately reflecting the myriad macro challenges in Europe and the United States," said Nicholas Colas, chief market strategist at ConvergEx. "Those will have to come to a head in the coming months, and at current levels on the CBOE VIX (fear gauge) Index markets are simply not discounting the volatility that is to come."

Colas said that while the S&P 500 is essentially unchanged over the past 30 days, the implied volatility of eight of the 10 sectors in the index are down between 4% to 21%. Only health care and telecom stocks are higher over the period. Beyond this, the implied volatility of everything from EAFE (Europe, Australasia, Far East) stocks -- down 5% -- to emerging markets -- down 8% -- to high yield corporates -- down 18% -- is lower over the same period.

"While markets are meant to discount the future, it is hard to believe that the multivariate challenges facing risk assets can be imbedded in asset prices with so much incremental uncertainty waiting in the wings," said Colas. "Our best advice: cancel your summer vacation."

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