Dow and S&P at highest close since summer

A surprisingly strong report on the housing market and the prospect of more cash for the International Monetary Fund to fight off a financial crisis powered stocks Wednesday to their highest close since last summer.

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 bitter fight in Washington over the federal debt limit.

The S&P is up 4 percent for the year, the Dow 3 percent.

"We think things are setting up to be better than last year," said Brad Sorensen, director of market research at Charles Schwab.

The National Association of Home Builders index, a measure of sentiment among builders, rose to its highest level since June 2007 as sales jumped.

In another encouraging sign, the Federal Reserve said manufacturing rose 0.9 percent from November to December.

Christine Lagarde, managing director of the IMF, said the fund wanted to raise $500 billion. The IMF has put up roughly a third of the rescue loans to debt-hobbled European countries over the past two years.

In other trading, Goldman Sachs stock added almost 7 percent after its quarterly profit beat Wall Street expectations.

The Dow finished up 96.88, or 0.78 percent, at 12,578.95. The S&P rose 14.37, or 1.11 percent, to 1,308.04. The Nasdaq composite index, which has outperformed the other two this year, rose 41.63 points, or 1.53 percent, to 2,769.71.

-- AP