Updated from 2:43 p.m. EDT

Stocks in New York had a volatile session Wednesday before closing higher, paced by gains in technology shares.

At the close, the Dow Jones Industrial Average had gained 47.55 points, or 0.6%, to 7837.11, and the S&P 500 added 9.61 points, or 1.2%, to 825.16. The Nasdaq was up 29.05 points, or 1.9%, to 1590.66.

The market had been higher early, but it pulled back after the Federal Reserve released the minutes of its March meeting. The minutes indicated that "the staff's projections for real GDP in the second half of 2009 and in 2010 were revised down, with real GDP expected to flatten out gradually over the second half of this year and then to expand slowly next year as the stresses in financial markets ease, the effects of fiscal stimulus take hold, inventory adjustments are worked through, and the correction in housing activity comes to an end."

The FOMC's participants didn't interpret the uptick in housing starts in February as the beginning of a new trend, but some noted that there was a limited chance for housing activity to fall further, according to the minutes. Most participants viewed downside risks as "predominating in the near term" due to the effects of reduced employment and lower consumer spending and investment.

After the pullback though, stocks recovered late to rise for the first time this week.

General Motors ( GM), Citigroup ( C) and Bank of America ( BAC) were weaker on the Dow , but American Express ( AXP) rose 4.7%, Alcoa ( HD) climbed 3.5%, and Home Depot ( HD) added 3.1%.

Earlier in the day, a homebuilding deal and a lifeline to life insurers helped offset earnings jitters that began with Alcoa after Tuesday's close. The aluminum maker said first-revenue was down 27% from the fourth quarter and 36% from a year ago owing to falling aluminum prices and the weak economy. Shares ended up adding 27 cents to $8.06.

Elsewhere in earnings, Ruby Tuesday ( RT) rocketed 56.8% to $6.10 on better-than-expected third-quarter results and a forecast for a narrowed loss in 2009. Family Dollar ( FDO) climbed 6% after reporting that its profit rose 33%, also beating expectations.

While Alcoa's earnings release marked the traditional start of earnings season, the real litmus test will be the banks, which will likely drive the market one direction or the other, says Brian Bethune, chief U.S. financial economist at IHS Global Insight. JP Morgan Chase ( JPM) will kick off those earnings on Monday.

Diverting attention from worries about quarterly numbers, Pulte Homes ( PHM) said it has agreed to buy Centex ( CTX) for $1.3 billion. The deal, which will create the nation's largest homebuilding company , launched Centex shares 18.9% to $9.06, while Pulte Homes fell 10.5% to $9.64.

"Given there's a lot of overcapacity, I wouldn't be surprised if the whole sector consolidates," says Bethune. "This is one of the problems you get into as the recession continues. The excess capacity in various industries forces mergers in banking, housing and automotive, for instance."

The market, which has rallied for four weeks, has run into a number of doubters in recent days. Calyon analyst Michael Mayo warned that the underlying situation hasn't changed for banks. Then investors George Soros and Marc Faber cautioned that the market could be set for a pullback. Finally, famously bearish Nouriel Roubini, a business professor at New York University, said he expects bleak macroeconomic data and problems in the banking and housing sectors to continue.

Helping matters a bit this time was news from the Mortgage Bankers Association that its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, increased 4.7% for the week ended April 3.

Also, Bank of America economists Gary Bigg and David Rosenberg said in a report that "disinflationary forces combined with overt quantitative easing from the Federal Reserve will push the 30-year fixed rate mortgage down from the current 4.85% rate to 4.2% by year-end."

Separately, the Commerce Department reported that U.S. wholesale inventories fell a record 1.5% in February, the six straight month of decline, while sales increased 0.6%. The change in inventory was more than twice the anticipated drop.

"The decline nonetheless represents progress and U.S. companies have calibrated their output sufficiently to the new, lower levels of demand," writes Tony Crescenzi, chief bond strategist at Miller Tabak and a RealMoney.com contributor.

Life insurers got a boost on news that the U.S. government may be widening the window of companies that qualify for aid during the continuing recession. The Treasury Department will open the Troubled Asset Relief Program to several qualifying life insurers , according to a report from The Wall Street Journal.

A Treasury representative reportedly said that while the government may allow insurance companies that own banks or thrifts to receive TARP money, no funds have been approved yet, according to CNBC.com.

Prudential Financial ( PRU) rose 7.7%, Hartford Financial Services ( HIG) rose 13.5%, and Lincoln National ( LNC) surged 32.8% on that news.

Meanwhile in tech, electronics maker Spansion ( SPSN), which has filed for bankruptcy protection, will receive $70 million in a settlement of patent lawsuits with Samsung. Spansion's shares surged 63%, albeit that was only 8.5 cents to 22 cents.

Word that the Securities and Exchange Commission put five approaches to the uptick rule concept up for a 60-day comment period didn't have a great deal of impact on the market, but the situation will bear watching in the weeks ahead.

Oil fell 23 cents to settle at $49.38 a barrel, and gold was up $2.60 to $885.90 an ounce.

U.S. crude-oil stockpiles in the week ended April 3 rose by 1.6 million barrels, slightly missing expectations for a 1.9-million barrel build, according to a report from the Department of Energy.

Longer-dated Treasuries were higher. The 10-year was up 15/32 to yield 2.8%, and the 30-year was adding 1-4/32 and yielding 3.7%.

Stocks overseas were mixed. In Europe, London's FTSE 100 fell 0.1%, while Frankfurt's Dax rose 0.8%. The Nikkei 225 lost 2.7%, and the Hang Seng in Hong Kong was down 3%.

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