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Stocks Get Billionaire Boost

Word that Ed Lampert and Warren Buffett are loading up helps lift the Dow to another record high.

Updated from 4:25 p.m. EDT

The major indices in New York had a rocky morning, but after they found their footing the bulls took charge and lifted stocks to a higher close Wednesday.

For the

Dow Jones Industrial Average

, that meant another best-ever finish. This time, the index rose 103.69 points, or 0.77%, to 13,487.53. Earlier, the Dow had been down by 20 points before rebounding for its 23rd record of 2007.

Supporting the advance was a 4% gain in component

Citigroup

(C) - Get Citigroup Inc. Report

and a 2% increase in

Johnson & Johnson

(JNJ) - Get Johnson & Johnson (JNJ) Report

. Helping Citi, and by extension the financial sector, was word that hedge fund manager Ed Lampert has taken an $800 million stake in the company.

J&J was similarly spurred by the disclosure that billionaire investor Warren Buffett has added to his holdings in the health care giant.

At the same time, Buffett and Carl Icahn combined to perk up the rail sector after regulatory filings detailed their interests in transporters like

CSX

(CSX) - Get CSX Corporation Report

.

Meanwhile, the

S&P 500

added 12.95 points, or 0.86%, to 1514.14, and the

Nasdaq

finished ahead by 22.13 points, or 0.88%, at 2547.42.

Breadth was positive for the first time this week. About 2.85 billion shares changed hands on the

New York Stock Exchange

, with advancers beating decliners by a 3-to-2 margin. Volume on the Nasdaq reached 2.11 billion shares, and winners outpaced losers 9 to 7.

(To check out each of these investors' holdings, visit the Warren Buffett, the Edward Lampert and the Carl Icahn portfolio pages on Stockpickr.com.)

Knowing that deep-pocketed investors remain interested in the market contributed to stocks overcoming a shaky start.

Earlier, traders received mixed news on the housing front. The government said U.S. home starts jumped a greater-than-expected 2.5% in April to 1.53 million annualized units. On average, economists expected new construction to total 1.48 million units.

The report wasn't completely free of bad news, though. Building permits tumbled 8.9% to 1.42 million last month, well below the expected 1.52 million annual pace.

Ian Shepherdson, chief economist with High Frequency Economics, said that the rate of the housing decline is slowing, but the bottom is not yet in sight.

"Permits matter much more than starts because they are less affected by the weather," he said. "The drop in April permits is therefore alarming. The data are consistent with the renewed drop in homebuilders' sentiment in recent months, and we expect the fall in permits to be reflected in starts in due course."

Also on the economic docket, the

Federal Reserve

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said that industrial production rose 0.7% last month, above estimates for a 0.3% rise. Capacity utilization rose to 81.6%, compared with forecasts of 81.5%.

Following the previous close, one of the key names in semiconductor group, gearmaker

Applied Materials

(AMAT) - Get Applied Materials, Inc. Report

, posted second-quarter profits and revenue that topped analysts' expectations. Still, Applied Materials lost 61 cents, or 3.1%, to end at $19.17.

Applied Materials' decline pressured the Philadelphia Semiconductor Sector Index, which slipped 0.1%.

The new day brought earnings from other well-known names. At farm-equipment seller

Deere

(DE) - Get Deere & Company Report

, earnings were much stronger than anticipated, but sales were on the light side. Shares of Deere were lower by $2.26, or 1.9%, to $118.40.

Additionally, electronics behemoth

Sony

(SNE) - Get SONY GROUP CORPORATION SPONSORED ADR Report

posted annual net income that rose 2.2% and revenue that advanced 10.5% from last year. The stock added $3.15, or 6%, to $55.85.

Shares of

Dell

(DELL) - Get Dell Technologies Inc Class C Report

ended higher even after news that the New York attorney general is suing the company over its sales practices. The PC maker's stock rose $1.25, or 5.1%, to close at $25.92.

Energy prices were mixed in the wake of the Energy Department's weekly inventory report, which showed a rise of 1 million barrels in crude inventories. Gasoline stocks added 1.7 barrels, and distillate stocks jumped 1 million barrels.

The front-month June oil contract fell by 62 cents to $62.55 a barrel, while gasoline ended higher by 3.5 cents at $2.33 a gallon.

Metals prices tumbled. Gold lost $13 to end the day at $662.50 an ounce, and silver shed 38 cents at $12.93 an ounce.

Treasuries were stalled. The 10-year note was flat in price, yielding 4.71%, and the 30-year was unchanged, yielding 4.87%.

Overnight in Asia, Tokyo's Nikkei ticked up 0.1% to 17,529, and Hong Kong's Hang Seng collected a 0.3% gain to 20,937. European bourses were slightly lower, as London's FTSE was down 0.1% at 6560 and Frankfurt's DAX eased 0.3% to 7484.

Retail earnings will pour in on Thursday.

JCPenney

(JCP) - Get J. C. Penney Company, Inc. Report

,

Kohl's

(KSS) - Get Kohl's Corporation (KSS) Report

and

Nordstrom

(JWN) - Get Nordstrom, Inc. (JWN) Report

are all expected to report.