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Stocks end day up sharply as S&P back up over 1,300

By msnbc.com news services

Stocks ended trading Wednesday sharply higher as good news from the International Monetary Fund, Goldman Sachs, and home builders helped buoy the market.

The benchmark S&P 500 topped 1,300, a key point that analysts said could trigger more selling if it is convincingly pierced, and one not reached since last July.

According to preliminary calculations, the Dow Jones industrial average rose 96.88 points, or 0.78 percent, to 12,578.95. The Standard & Poor's 500 ended 14.36 higher, or 1.11 percent, to 1,308.03. The Nasdaq Composite finished up 41.63 points, or 1.53 percent, at 2,769.71.

Stronger-than-expected earnings from Goldman Sachs Group Inc followed disappointing results from Citigroup on Tuesday and JPMorgan Chase & Co last week. Goldman shares jumped.

Home builders' shares surged after data showed U.S. homebuilder sentiment unexpectedly jumped in January to its highest level in 4-1/2 years.

Another boost for the banking sector, though, was a report the IMF is seeking to boost its war chest by $600 billion to help countries reeling from the crisis, even though some nations insist Europe must first do more to support ailing members, according to sources.

"Any time liquidity is added to the financial system, it gives financials a little bit of breathing room, and it will result in higher prices for the banks," said Kevin Caron, market strategist at Stifel, Nicolaus & Co, in Florham Park, New Jersey.

At the same time, Greece and its creditors resumed negotiations on terms of a planned debt swap, hoping to overcome an impasse in talks and stave off a painful default.

Within the tech sector, Yahoo Inc jumped a day after co-founder Jerry Yang said he was severing all formal ties with the company he started in 1995. Shareholders had blasted Yang for impeding investment deals that could have transformed the Internet media group.

Reuters contributed to this report.