The Dow Jones Industrial Average added a hefty 103.16 points (0.81 percent), finishing the session at 12,908.70.
The S&P 500-stock index climbed 9.11 (0.67 percent) to 1,372.78, while the tech-rich Nasdaq surged 32.56 (1.12 percent) to 2,942.60.
“Stocks edged higher throughout the session as investors overlooked a lackluster report of the Fed’s Beige Book and focused on positive corporate earnings,” said Wells Fargo Advisors.
The Fed’s Beige Book report said that “overall economic activity continued to expand at a modest to moderate pace in June and early July,” offering reassurance to investors worried about a recent run of disappointing indicators.
Fed Chairman Ben Bernanke, testifying for a second day to Congress, reiterated that the economy was slowing and the central bank would act if warranted to boost growth.
June housing figures were mixed. Housing starts surged 6.9 percent from May but building permits, a forward-looking indicator, fell 3.7 percent, the Commerce Department reported.
Quarterly earnings reports from Bank of America, Intel and Yahoo! beat Wall Street expectations.
Dow member Intel rose 0.5 percent. The world’s leading semiconductor maker reported second-quarter earnings per share of 54 cents, two cents better than estimates.
But Bank of America, another Dow component, tumbled 4.9 percent, weighing on financials. The bank posted a swing into profit in the second quarter, at $2.5 billion, compared with a year-ago loss of $8.8 billion. Morgan Stanley dropped 2.4 percent and Citigroup shed 1.0 percent.
Yahoo! gained 0.6 percent after reporting profit fell 4.0 percent in the past quarter.
California-based Vivus soared 9.6 percent after winning US regulatory approval for its new anti-obesity drug, Qsymia.
On Tuesday, stocks closed higher in choppy trade, with the Dow up 0.6 percent.
Bond prices rose. The 10-year Treasury yield fell to 1.48 percent from 1.50 percent Tuesday, while the 30-year dipped to 2.58 percent from 2.60 percent.
Bond prices and yields move in opposite directions.
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