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."

The Commerce Department reported Wednesday that durable goods orders rose 1.1% to $217.2 billion in May, which was much better than expected; the consensus was for a 1% increase, according to

Excluding transportation, new orders increased 0.4%, and excluding defense, new orders increased 0.7%.

Still, April's figure was downwardly revised to a 0.2% decrease.

"There is nothing in today's report to change the view that orders and shipments are likely to be weak in the second quarter, cautioned Dan Greenhaus, chief global strategist at BTIG. "Shipments of core goods are a proxy for an important component of the GDP report were up a modest 0.4%, only partially recouping some of April's move lower."

In other economic news, the National Association of Realtors reported that its pending home sales index rose 5.9% to 101.1 in May from 95.5 in April. That puts the index 13.3% above May of last year when it was 89.2. The increase was better than the 0.5% expected by the market and the level matched that of the highest in the past two years.

German Chancellor Angela Merkel was scheduled to meet with French President Francois Hollande in Paris Wednesday on the eve of the two-day eurozone summit, following Merkel's reassertion that her country objected to shared liability.

Germany, however, may consider the idea of eliminating the preferred creditor status of the European Stability Mechanism permanent rescue fund, which is believed to have discouraged investors from taking up sovereign debt for fear of much steeper losses if a default were to occur.

The FTSE in London settled up 1.41% and the DAX in Germany finished up 1.5% on Wednesday.

"Markets are waiting for nothing to happen, with the euro heads of government summit looming on the horizon," said Paul Donovan, a global economist at UBS. "Expectations have been lowered so much that it is just possible that markets react positively to any decision. Alternatively, markets look at the broken structure of the Euro and ask 'is that it.'"

The Hong Kong Hang Seng index closed up by 1.03% and the Nikkei in Japan settled up by 0.77%.

August crude oil futures settled up 85 cents at $80.21 a barrel. August gold futures shed $3.50 to settle at $1,578.40 an ounce.

The benchmark 10-year Treasury was up 2/32, diluting the yield to 1.626%, while the greenback rose 0.24%, according to the dollar index.

In corporate news, Facebook ( FB) was down slightly in afternoon action as a slew of analysts initiated coverage of the social networking giant, giving the stock mixed reviews. The share closed off 2.8%.

Shares of Arena Pharmaceuticals ( ARNA) soared more than 28% after the company's weight loss pill Belviq secured marketing approval from the Food and Drug Administration.

Bristol-Myers Squibb ( BMY) announced an additional $3 billion buyback authorization after Tuesday's closing bell. Shares added 1.7%.

Seed giant Monsanto ( MON) reported third-quarter profit of $1.63 a share, beating the profit estimate of $1.60 a share of analysts surveyed by Thomson Reuters. Shares gained nearly 4%.

Home builder Lennar ( LEN) reported second-quarter earnings of 21 cents a share, beating the average analyst expectation for earnings of 17 cents a share. Shares rose 4.7%.

Food company General Mills ( GIS) is projecting full-year profit of $2.65 a share, falling short of the consensus estimate of $2.75 a share, according to Thomson Reuters. Shares fell 1.6%.

-- Written by Andrea Tse and Joe Deaux in New York.

>To contact the writer of this article, click here: Andrea Tse.