Wall Street edge higher as banks rally

The Dow Jones Industrial Average rose 26.33 points (0.23 per cent) to close at 11,559.49, while the S&P 500 index, a broader measure of the market, gained 4.24 points (0.34 per cent) to 1,258.84.

The tech-rich Nasdaq gained 3.87 points (0.15 per cent) to 2,671.48.

"The rally continues, even though volume is rather light," said analyst Peter Cardillo of Avalon Partners.

The Commerce Department reported shortly before trade opened that the rate of the US economic growth in the third quarter was revised up to 2.6 from a previous estimate of 2.5 per cent.

The upbeat revision points to a improving US recovery driven by higher consumer spending, business investment and stronger exports.

It nevertheless fell slightly short of most analysts' forecasts of an upward revision to 2.8 per cent.

Trade remained cautious and light in volume after the National Association of Realtors said sales of previously-owned US homes rose in November by 5.6 per cent from the previous month to 4.43 million.

The number was slightly higher than economists' forecasts of a rise to 4.65 million sales.

"The economic data that we had was a bit disappointing in terms of market expectations but nevertheless they seem to point in the same direction that the economy is probably doing much better in 2011," Cardillo said.

Financial stocks continued to shine, with Bank of America rising 3.1 per cent, JPMorgan up 2.9 per cent and Wells Fargo gaining 1.6 per cent. Citigroup nevertheless traded 0.1 per cent lower.

Bank of America shares have popped more than 22 per cent in December despite reports that whistle-blowing website WikiLeaks was to release a cache of damning documents on the largest US bank.

In corporate news, shares of Nike slumped 5.8 per cent after the sports wear company warned earnings could be hit next year by rising production prices, despite reporting a robust 22 per cent rise in quarterly earnings.

The bond market declined.

The yield on the 10-year Treasury bonds rose to 3.35 per cent from 3.33 per cent on Tuesday, while that of the 30-year bond was up to 4.45 per cent from 4.43 per cent. Bond prices and yields move in opposite directions.