Another quiet day on Wall Street: Dow industrials creep up 2 points

NEW YORK - U.S. stocks rose for a second day Wednesday as a drop in wholesale inventories and improvement in corporate bond markets added to signs the economy is strengthening, overshadowing concern China will raise interest rates.

The S&P 500 rose 0.5 percent to 1,145.61, and earlier jumped 0.7 percent to within 2 points of its 2010 high. The Dow Jones industrial average increased 2.95 points, or less than 0.1 percent, to 10,567.33.

"The bias for stocks is higher," said Eric Teal, chief investment officer at First Citizens BancShares Inc. in Raleigh, N.C. "The economic readings have surprised and will continue to surprise given the strength of the profit cycle. Looking abroad, there are lots of different signals from China. However, the overwhelming view is that China will go slow on monetary tightening."

Wednesday was the anniversary of the 2009 bear-market low for the S&P 500. The index has rallied 69 percent from a 12-year low last March as the Federal Reserve has kept its benchmark interest rate near zero to stimulate economic growth.

Stocks extended gains in early trading after inventories at U.S. wholesalers unexpectedly dropped 0.2 percent in January, signaling companies had difficulty keeping pace with demand, government data showed.

AIG rallied for a fifth straight day, its longest streak since August. The shares gained 11 percent to $36.24 and have jumped about 46 percent since March 3 on speculation the company will be able to repay a government bailout and meet other debt obligations. The insurer reaped at least $3.2 billion for bondholders after announcing deals to sell its two largest non-U.S. life insurance divisions for $51 billion.

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