Stocks End Up After Late Rally

Updated from 4:15 p.m. EDT

Stocks in New York were strong early Wednesday, sluggish in the afternoon and then positive again into the close, leaving the major averages higher for the session.

The Dow Jones Industrial Average rose 89.84 points, or 1.2%, to 7749.81, and the S&P 500 tacked on 7.63 points, or 1%, to 813.88. The Nasdaq Composite added 12.43 points, or 0.8%, to 1528.95.

Wall Street initially rallied after better-than-expected data on durable goods and new-home sales, but then stocks fell following a weaker-than-anticipated auction of Treasury notes. However, a surge in the final hour lifted the indices back above the flat line, marking the second advance in three days this week.

"There was some concern about the Treasury auction and also ahead of the GDP reading tomorrow, but buyers are waiting for anything they can get," says Marc Pado, U.S. market strategist for Cantor Fitzgerald. "We're likely already seeing window dressing before the end of the quarter, and when you see the Dow move 75 points higher in five minutes, that's not new money coming in, that's short-covering."

At the end of the day, JP Morgan Chase ( JPM) and Bank of America ( BAC) led the Dow's gainers, adding 8.2% and 6.7%, and the KBW Bank Index was nearly 5% higher.

When viewing the recent run-up in financial stocks, investors should keep in mind that they "were decimated" and starting at very low levels, says Doug Roberts, chief investment strategist at There was a sharp reaction to the Fed's announcement last week, and again to the public-private investment plan, "but there's still the question of how much it's going to work," he says.

If you liked this article you might like

Fed Pares $4.5 Trillion Balance Sheet But Easy-Money Era Isn't Over

Bank Stocks Move Higher as Fed Decides to Start Unwinding Balance Sheet

Bank Stocks Move Higher Ahead of Federal Reserve Meeting

All Eyes on the Godfather of Central Banking as Fed Has Huge Meeting This Week

The Stock Market Stinks and the Stench Is Going to Get Much Worse Soon