Meanwhile, a government report found that U.S. crude inventories fell more than expected last week. That stirred hopes that a strengthening economy is increasing its appetite for resources and lifted energy stocks.
The Dow Jones Industrial Average rose 80.26 points, or 0.8%, to 9627.48, while the S&P 500 added 10.77 points, or 1%, to 1044.14. The Nasdaq Composite advanced 23.63 points, or 1.2%, to 2084.02.
Stocks have surprised some market observers by extending gains this week after a three-day weekend on light volume. But there isn't a lot of driving force in terms of buying activity coming from the institutional side just yet, says Anu Sharma, managing director of the market intelligence desk at Nasdaq OMX. While longer-term traders are sitting on their hands, it's "a technical trader's dream," he says.
"There's a little underlying nervousness amongst a lot of investors who are still trying to get a handle on why this market moves higher with earnings and a lot of economic news already priced in," says Sharma. "We've had this tremendous rally, but it seems to be a little empty of late, and when you have a marketplace that's pretty much 60% to 65% traded through algorithm and hi-fi trading, that's the result -- these algorithms kick in and drive momentum."
In other news, OPEC decided to leave its production targets unchanged for the third time this year. Crude oil futures rose 63 cents, to $71.94.
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