NEW YORK A surprisingly strong report on the housing market and the prospect of more cash for the International Monetary Fund to ward off a financial crisis powered stocks Wednesday to their highest close since July.
The Standard & Poor's 500 index closed above 1,300 for the first time since July 28, and the Dow Jones industrial average finished at its highest since July 25. That was just before the fight over the federal debt limit.
It was also the first time since Jan. 3, the first trading day of the year, that the S&P 500 moved more than 1 percent. The market has made a quiet ascent since then. The S&P is up 4 percent for the year; the Dow, 3 percent.
"The worst-case scenario is off the table," said Brad Sorensen, director of market research at Charles Schwab.
The National Association of Home Builders index, a measure of builders' sentiment, rose to its highest level since June 2007 as sales jumped.
The Federal Reserve said manufacturing rose 0.9 percent from November to December, the biggest gain since December 2010.
Christine Lagarde, managing director of the IMF, said the fund wanted to raise $500 billion more to lend to countries.
The Dow finished up 96.88, or 0.8 percent, at 12,578.95. The S&P rose 14.37, or 1.1 percent, to 1,308.04. The Nasdaq composite index, which has outperformed the other two this year, rose 41.63 points, or 1.5 percent, to 2,769.71.