S&P 500 closes at record on bank earnings, data

In the latest economic data, the seasonally adjusted Producer Price Index rose 0.4 percent last month, the biggest increase since June, although inflation pressures remained benign. The Federal Reserve Bank of New York's "Empire State" index of general business conditions climbed to its highest level in 20 months.

The data reassured investors that the economy is able to stand on its own even as the Federal Reserve begins to slow its massive stimulus programs, which contributed to huge equity gains in 2013. Wall Street's rally on Wednesday erased some of 2014's early weakness, putting the S&P 500 near the break-even level for the year.

In its latest Beige Book report on business activity, the Fed said the economy grew at a moderate pace from late November through the end of 2013, with some regions of the country expecting a pickup in growth.

"The general trend of economic numbers is pretty positive, and helping to get people over the shock of the recent weak payroll report," said Kelly, who helps oversee USD 400 billion in assets. "An improving economy is a trend of 2014, and that will be good for equities throughout the year."

The Dow Jones industrial average rose 108.08 points, or 0.66 percent, to end at 16,481.94. The Standard & Poor's 500 Index advanced 9.50 points, or 0.52 percent, to close at 1,848.38. The Nasdaq Composite Index gained 31.87 points, or 0.76 percent, to finish at 4,214.88.

The S&P 500 ended at a record high, beating its previous record close by just 0.02 of a point. At its session peak, the index climbed to 1,850.84, a record intraday high.

Apple Inc shares rose 2 percent to USD 557.36 a day after Chief Executive Officer Tim Cook said the company's deal with China Mobile would help it build on its momentum in the country. This was the third straight day of gains for the tech giant, and it is up 4.6 percent over that period.

Trading will probably be driven by earnings as the season continues. With only 5 percent of the S&P 500 having reported results so far, 52 percent of companies have topped earnings expectations, according to Thomson Reuters data, a rate that is below the historical average of 63 percent.

After the closing bell, CSX Corp reported fourth-quarter earnings and sales that were slightly below expectations. Shares fell 2.1 percent in extended-hours trading. CSX ended the regular session at USD 29.23, up 1.2 percent.

During regular trading, Tesla Motors Inc shares rose 1.8 percent to USD 164.13. The stock's advance came a day after the electric car maker said that deliveries of its Model S sedan in the fourth quarter sharply exceeded what the company had forecast.

SolarCity Corp shares gained 4.5 percent to close at USD 68.50 after the top U.S. solar installer unveiled a plan to let investors, including individuals, invest in its rooftop solar systems.

Shares of Chelsea Therapeutics soared after an advisory panel to the US Food and Drug Administration concluded on Tuesday that the company's drug to treat a rare form of low blood pressure is effective enough to warrant regulatory approval. The stock jumped 91.7 percent to USD 4.41.

On the downside, the stock of Fastenal Co slid 4.5 percent to USD 46.06 and ranked as the S&P 500's biggest decliner after the industrial and construction supply company reported fourth-quarter earnings below expectations.

About 62 percent of the stocks traded on the New York Stock Exchange closed higher, while 63 percent of Nasdaq-listed shares ended in positive territory.

Roughly 5.95 billion shares traded on all US platforms, according to BATS exchange data.