The Dow Jones Industrial Average closed up 97 points, or 0.5%, at 12,545. The S&P 500 was up 14 points, or 1.1%, at 1,308. The Nasdaq rose 42 points, or 1.5%, to 2,770.
NEW YORK ( TheStreet) -- Stocks rose Wednesday, with the S&P 500 settling above 1,300 for the first time since late July, as investors looked to a confluence of positive news, from Goldman Sachs earnings to the possibility of more debt funding for Europe.
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The Bureau of Labor Statistics said producer prices dropped 0.1% in December, falling short of estimates. Economists had expected producer prices to rise 0.1% last month, according to Zacks.com. "Heading into today's report, we knew that food and energy prices would weigh on the headline producer price index for December and indeed that ended up being the case," Dan Greenhaus, chief global strategist at BTIG, wrote. "To the extent one may be monitoring inflation developments with regards to what the Fed may or may not do, slower rates of price increases play right into the Fed's hand, providing more room for the more dovish members of the FOMC to support additional easing measures." The Federal Reserve also disappointed economists after reporting that industrial output rose 0.4% in December after falling a revised 0.3% the prior month. Economists had expected output to rise 0.5%. However, lifting the broader market was Goldman Sachs ( GS), which joined Wells Fargo ( WFC) in reporting better-than-expected results Wednesday morning. Bank of America ( BAC) and JPMorgan Chase ( JPM) led the Dow higher. Four Dow components of 30 fell, dragged by Procter & Gamble ( PNG) and Boeing ( BA). Although Goldman Sachs's profit fell 58%, the investment bank beat the average analyst estimate by cutting costs. The company earned $1.81 a share in the fourth quarter, compared with $3.79 a share a year earlier. Analysts expected to see earnings of $1.46 a share, according to Zacks.com. Goldman Sachs shares climbed 6.8% to $6.63. Bank of New York Mellon ( BK), however, joined Citibank ( C) and JPMorgan Chase ( JPM) in disappointing Wall Street. The lender's fourth-quarter earnings fell to 42 cents a share as net income dropped 26%. Analysts had expected to see earnings of 53 cents a share. Bank of New York shares dropped 4.6% to $20.30. In other corporate news, Yahoo! ( YHOO) co-founder Jerry Yang resigned from the Internet company's board, as well as the boards of Yahoo! Japan and Alibaba Group, citing the need to "pursue other interests outside Yahoo!" for the decision. The news could be a sign that Yahoo! is getting ready to make a deal, either to dispose of certain assets or sell the company outright. The company's shares gained 3.2% to $15.92. Samsung dismissed rumors that emerged Tuesday suggesting that the South Korean maker of Google's ( GOOG) Android phones and Microsoft's ( MSFT) Windows phones was interested in purchasing the struggling BlackBerry maker Research In Motion ( RIMM). James Chung, a spokesman for Samsung, was quoted by Reuters as saying: "We haven't considered acquiring the firm and are not interested in (buying RIM)." Research in Motion decreased 1.1% to $17.28. Active Power ( ACPW), the maker of backup mechanical batteries, announced that it renewed a global distribution agreement with Caterpillar ( CAT) that for the next five years. Active Power shares jumped 7.9% to 96 cents.
February oil futures fell 17 cents to $100.88 a barrel, while February gold futures rose $4.30 to $1659.90 a barrel. The dollar index was dropping 0.7%. The benchmark 10-year Treasury was falling 11/32, increasing the yield to 1.897%. -- Written by Chao Deng and Kaitlyn Kiernan in New York.