NEW YORK (Reuters) - U.S. stocks rose on Wednesday, with the S&P 500 hitting a record high after strong earnings from Bank of America (Symbol : BAC ) and data pointed to improvement in the economy.

Bank of America Corp (Symbol : BAC ) shares climbed 2.7 percent to $17.22 and gave one of the biggest boosts to the S&P 500 after the second-largest U.S. bank said its quarterly profit surged by nearly $3 billion, as revenue increased and mortgage losses plunged in the clearest sign yet that the bank was shaking off the impact of the financial crisis. "Going forward, it's back to earnings, and we're keeping an eye on the banks," said Yu-Dee Chang, chief trader of ACE Investments in Vienna, Virginia. "The mortgage side of (the business) wasn't great for the fourth quarter, but despite that, banks are doing great."

Wells Fargo & Co on Tuesday posted a better-than-expected quarterly profit, but mortgage lending slowed to the lowest level in five years. The seasonally adjusted Producer Price Index rose 0.4 percent last month, the biggest increase since June, although inflation pressures remained benign, data showed. In addition, the New York Federal Reserve Bank's "Empire State" index of general business conditions climbed to its highest level in 20 months. "We're going from 'bad news is good news' to 'good news is good news.' No one wants to see the economy doing badly anymore," Chang said.

The Federal Reserve had pointed to a struggling economy during the years of extraordinary stimulus that helped put a floor under equity prices. The U.S. central bank, however, decided last month to start withdrawing that stimulus, and investors are looking for signs that the economy can stand on its own.

The Dow Jones industrial average rose 124.04 points or 0.76 percent, to 16,497.90. The S&P 500 gained 10.28 points or 0.56 percent, to 1,849.16, just off a record intraday high of 1,850.84. The Nasdaq Composite added 29.2 points or 0.70 percent, to 4,212.216. On Tuesday, the S&P 500 rose 1.1 percent, its biggest gain since December 18, as a strong December retail sales reading eased concerns that economic growth might be slowing and stocks may be expensive.

By midday on Wednesday, the S&P financial index was up 1 percent. General Motors Co (Symbol : GM ) said it will pay the first quarterly dividend on its common stock in almost six years. The automaker's new executive team said while it expects a slight uptick in pre-tax profits this year, margins likely would remain flat until 2015. GM's stock lost 1.7 percent to $39.32.

Tesla Motors Inc shares shot up 2.4 percent to $165.20 a day after the electric car maker said that deliveries of its Model S sedan in the fourth quarter sharply exceeded what the company had forecast. The stock of SolarCity Corp gained 3.8 percent to $68.06 after the top U.S. solar installer unveiled a plan to allow investors, including individuals, to invest in its rooftop solar systems. Shares of Chelsea Therapeutics (Symbol : CHTP ) more than doubled in price after an advisory panel to the U.S. Food and Drug Administration concluded on Tuesday that the company's drug to treat a rare form of low blood pressure is effective enough to warrant regulatory approval. The stock jumped 107.4 percent to $4.77.

In contrast to the session's upward trend, Fastenal Co slid 5.3 percent to $45.67 after the industrial and construction supply company reported fourth-quarter earnings below expectations.