The S&P 500 gained 0.2% on Wednesday, as strong earnings from Bank of America (BAC 28.45, +1.90, +7.2%) and Goldman Sachs (GS 197.08, +17.17, +9.5%) helped keep the rally going. The benchmark index was up as much as 0.6%, but succumbed to selling pressure into the close.

The Dow Jones Industrial Average gained 0.6%, the Nasdaq Composite gained 0.2%, and the Russell 2000 gained 0.7%.

The S&P 500 financial sector carried the load on Wednesday with a sizable gain of 2.2%. Conversely, the consumer staples (-0.5%) and communication services (-0.4%) sectors underperformed the broader market.

Bank of America and Goldman Sachs climbed 7.2% and 9.5%, respectively, after both exceeded Wall Street's expectations for revenue and earnings in the fourth quarter.

Their outperformance helped underpin the strength in the financial sector, which is now up 6.6% in January. The overwhelmingly positive response to their earnings news was rooted in the idea that the results demonstrated the December negativity surrounding the stocks -- and the sector -- was overdone.

United Continental (UAL 86.36, +5.16, +6.4%) also reported better-than-expected top and bottom lines. Its strong report, and a reassuring outlook, helped lift the Dow Jones Transportation Average (+0.5%) and airline stocks as a whole.

The market has had its fair share of earnings warnings during this rally and Wednesday was no exception. Still, the stock market seemed unaffected by a fourth quarter earnings warning from Ford Motor (F 8.29, -0.55, -6.2%) and retailer Nordstrom (JWN 45.01, -2.25, -4.8%) saying its full-year earnings are expected to be at the low end of its previous outlook due to weaker-than-expected holiday sales.

The warnings may have tempered some buying interest, but it was the upbeat earnings reports that swayed investors, keeping the broader market afloat all session.

The positive reaction to earnings had the S&P 500 flirting with its 50-day moving average (2628.59) for the first time since early December -- that is, until a Wall Street Journal report indicated that the U.S. Department of Justice is pursuing criminal charges against Huawei for IP theft. The news preceded the late selling action into the close.

Separately, there was some merger news of note on Wednesday. Fiserv (FISV 72.57, -2.47, -3.3%) announced a $22 billion, or $22.74 per share, all-stock offer to acquire First Data (FDC 21.24, +3.70, +21.1%).

U.S. Treasuries ended on Wednesday on a lower note, pushing the 2-yr yield and 10-yr yield up two basis points each to 2.54% and 2.73%, respectively. The U.S. Dollar Index was flat at 96.08. WTI crude reversed course to finish higher by 0.8% at $52.33/bbl.

Overseas, UK Prime Minister Theresa May survived a no-confidence vote a day after her Brexit plan was soundly defeated. Her ability to survive the no-confidence vote was widely expected and, like Tuesday, the outcome was a non-factor for U.S. markets.

Reviewing this Wednesday's economic data, which included the NAHB Housing Market Index, Import and Export Prices for December, the Fed's Beige Book for January, and the weekly MBA Mortgage Applications Index:

• The NAHB Housing Market Index for January came in at 58 (Briefing.com consensus 56), up from 56 in December.
• Import prices declined 1.0% month-over-month and were down 0.6% year-over-year. Excluding fuel, they were unchanged in December and up just 0.5% year-over-year. Export prices declined 0.6% and were up 1.1% year-over-year. Excluding agricultural products, they were down 1.1% in December and up 1.0% year-over-year.
  • The key takeaway from the report is that it didn't ring any inflation alarm bells that would compel the Fed to be less patient with its monetary policy approach.
• The Federal Reserve's January Beige Book noted that eight out of twelve districts reported modest to moderate growth, but contacts had become less optimistic about their expectations due to increased volatility in financial markets, rising short-term rates, falling energy prices, and trade/political uncertainty.
• The weekly MBA Mortgage Applications Index rose 13.5% versus last week's increase of 23.5%.

Looking ahead, investors will receive the weekly Initial and Continuing Claims report and the Philadelphia Fed Index for January on Thursday.

• Russell 2000 +7.9% YTD
• Nasdaq Composite +6.0% YTD
• S&P 500 +4.4% YTD
• Dow Jones Industrial Average +3.8% YTD