NEW YORK — 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.
It was also the first time since Jan. 3, the first trading day of the year, that the S&P 500 moved more than 1 percent. The market has made a quiet ascent since then. The S&P is up 4 percent for the year, the Dow 3 percent.
Smaller stocks had the strongest gains, a sign that investors are becoming more comfortable taking on risk. The Russell 2000 index of small-company stocks rose 1.8 percent, more than the 1.1 percent gain in the S&P and the 0.8 percent gain in the Dow. The Nasdaq rose 1.5 percent.
“We think things are setting up to be better than last year,” said Brad Sorensen, director of market research at Charles Schwab. “The worst-case scenario is off the table.”
The National Association of Home Builders index, a measure of sentiment among builders, rose to its highest level since June 2007 as sales jumped. Analysts said it could be a sign the housing market has bottomed out.
The Dow finished up 96.88 at 12,578.95. The S&P rose 14.37 to 1,308.04. The Nasdaq composite index, which has outperformed the other two this year, rose 41.63 points to 2,769.71.
