NEW YORK, Oct. 18 -- U.S. stocks traded higher on Wednesday amid stronger-than-expectation housing data, overcoming negative earning reports.
According to the Commerce Department, U.S. housing starts climbed 15 percent to a seasonally adjusted annual rate of 872,000 units in September, soaring to its fastest rate in four years.
Investors cheered up on the strong housing data. Many believed that the data suggested the country's housing market is on the way to recovery.
The positive sentiments outweighed negative earning reports, especially from technology companies.
Intel's CEO warned after the closing bell on Tuesday of a difficult environment ahead and IBM's quarterly revenue was also disappointing.
The technology shares went down and led the laggards on Wednesday and the stock of IBM fell nearly 5 percent.
However, banking sector was the best performer on Wednesday on better-than-expectation earning report.
Bank of America, the U.S. second largest lender, said on Wednesday its profits for the third quarter fell sharply by 95 percent on litigation expenses, but still beating the market expectation.
The bank's net income fell to 340 million dollars, or a fraction of a penny per diluted share, before paying preferred dividends in the third quarter from 6.2 billion dollars, or 56 cents per diluted share, a year earlier, according to a statement from the firm.
The bank posted a 33 million dollars of net loss on results applicable to common shareholders.
Revenue dropped 28 percent to 20.4 billion dollars before adjustments.
Moreover, investor also felt more confident after rating agency Moody's kept its credit rating unchanged on Spain, in line with Standard & Poor's.
When the market closed, the Dow Jones Industrial Average added 5.22 points, or 0.04 percent, to 13,557.00. The Standard & Poor's 500 was up 5.99 points, or 0.41 percent, to 1,460.91. The Nasdaq Composite Index gained 2.95 points, or 0.10 percent, to 3,104.12.
The CBOE Volatility Index, generally considered the best gauge of fear in the market, closed at near 15.
As for other markets, U.S. crude oil edged up on Wednesday also because of positive housing data, despite the bigger-than-expected increase in crude stocks.
Light, sweet crude for November delivery gained 3 cent to settle at 92.12 dollars a barrel on the New York Mercantile Exchange. But Brent crude for December delivery edged down 78 cents, or 0.68 percent to close at 113.22 dollars a barrel.