Wall Street pulls off a winner

NEW YORK (CNNMoney.com) -- Stocks finished higher for the third straight session Wednesday, with the Dow industrials climbing over 150 points, on tech and housing sector strength and cooling credit market fears.

The Dow Jones industrial average (up 153.56 to 13,657.86, Charts) finished 153 points higher, or 1.14 percent, after nearly turning flat in the final half hour of trade.

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The tech-heavy Nasdaq Composite index (up 51.38 to 2,612.98, Charts) was the big winner, however, gaining 2 percent, while the broader S&P 500 (up 20.78 to 1,497.49, Charts) climbed 1.4 percent.

Some sectors experienced huge gains including the homebuilding sector, helped by a sharp jump in mortgage applications. Shares of Beazer Homes USA (up $2.98 to $15.01, Charts, Fortune 500) and luxury homebuilder Toll Brothers (up $1.38 to $24.33, Charts, Fortune 500), which warned of lower quarterly sales that were better than analysts' estimates, both soared.

Tech bellwether Cisco Systems (Charts, Fortune 500) helped stocks at the start of the session after reporting higher-than-expected earnings, sending its shares nearly 7 percent higher.

Other than a pullback in the final half hour of trading that was sparked by a rumor that investment bank Goldman Sachs (Charts, Fortune 500) may make an announcement related to one of its hedge funds, stocks were up for most of the session.

Also helping drive stocks higher were signs that recent troubles in the credit markets were subsiding, including news that battered Wall Street bank Bear Stearns (up $4.23 to $121.12, Charts, Fortune 500) raised $2.25 billion in capital.

"With Bear Stearns raising some capital and easing of credit fears, coupled with Cisco earnings, are leading to a positive tone," said Tony Dwyer, equity market strategist at FTN Midwest Research.

Stocks have experienced wild swings in recent weeks on credit market worries, with some market observers speculating that the Fed may step in to lend a hand.

Central bank officials held interest rates steady at Tuesday's policy meeting and hinted in their accompanying statement that they were not panicked about the recent turmoil in credit markets. (Read the Fed statement).

President Bush and Treasury Secretary Henry Paulson both spoke publicly Wednesday, stating that the economy remains healthy, although Paulson noted in that it will take some time to work through the housing market correction.

On the economic front, the National Association of Realtors said it expects home sales will continue to slow this year, but noted that home prices will drop far less than originally expected.

In other corporate news, Sprint Nextel (Charts, Fortune 500), the No. 3 U.S. wireless service, posted lower quarterly profit on Wednesday but beat analysts' average forecast as it added new subscribers.

Burlington Northern Santa Fe Corp. (up $1.35 to $82.60, Charts, Fortune 500) shares climbed nearly 3 percent after Warren Buffett's Berkshire Hathaway (up $305.00 to $112,995.00, Charts, Fortune 500) revealed it increased its stake in the railroad firm.

News Corp. (up $0.46 to $22.80, Charts, Fortune 500) reported better-than-expected results after the closing bell Wednesday, helped by profits in its Fox News division.

Market breadth was positive as gainers beat decliners by more than 2 to 1 on the New York Stock Exchange on volume of 2.59 billion shares. Winners topped losers by the same ratio on the Nasdaq on volume of 3.58 billion shares.

Treasury prices slumped as investors poured into the stock market, lifting the yield on the benchmark 10-year note to 4.86 percent, up from 4.77 percent late Tuesday. Bond prices and yields move in opposite directions.

Oil prices retreated on a surprise decline in gasoline inventories in the weekly U.S. inventory report. U.S. light crude for September delivery fell 22 cents to $72.20 a barrel on the New York Mercantile Exchange.

The dollar edged lower against the euro and climbed versus the yen. COMEX gold for December climbed $4 to $686.30 an ounce.