US stocks higher after CBO report

The government reported that new orders for long-lasting U.S. manufactured goods surged in July.

The Congressional Budget Office reported that a sweeping U.S. budget deal and lower interest rates will slice projected budget deficits nearly in half over the next 10 years.

The news provided a diversion to investors,fixed on hopes that Federal Reserve Chairman Ben Bernanke would announce new stimulus for a struggling U.S. economy in a speech in Friday. Hopes for such a plan fueled a 3 percent rally in Tuesday8217;s session.

Bernanke,however,is most likely to outline gradualist measures,which would disappoint investors looking for a big bang approach,such as a fresh round of bond buying.

The durable goods data looked very decent,but we8217;ll need a bigger catalyst to move higher,said Randy Bateman,chief investment officer of Huntington Asset Management in Columbus,Ohio,which oversees 14.5 billion. It would be nice to get one from Bernanke,but I don8217;t think that8217;s likely.

The Dow Jones industrial average was up 104.52 points,or 0.94 percent,at 11,281.28. The Standard amp; Poor8217;s 500 Index rose 12.25 points,or 1.05 percent,at 1,174.60. The Nasdaq Composite Index added 22.70 points,or 0.93 percent,at 2,468.76.

Bank of America Corp rose 8.5 percent to 6.83,reversing losses on Tuesday,when the Dow component hit a 2-1/2-year lows on fears it may have to raise massive amounts of capital. BofA shares remain down more than 30 percent so far this month.

Banks were the day8217;s top risers,with the Samp;P financial index up 2.4 percent. JPMorgan Chase amp; Co added 2.9 percent to 35.80.

In earnings news,Toll Brothers Inc reported third-quarter earnings that rose from the prior year but narrowed its home delivery order for the full year. The stock rose 4 percent to 15.36.

US stock index futures off after rally

U.S. stock index futures were lower on Wednesday following a sharp rally in the previous session as the market displayed little trend except volatility ahead of the upcoming Federal Reserve meeting.

Durable goods data on tap,seen rising 2 percent

Bank of America off premarket after hitting 2-1/2-yr low

Futures down: Dow 105 pts,Samp;P 11.5 pts,Nasdaq 19.5 pts

Hopes that Fed Chairman Ben Bernanke would announce new stimulus for a struggling U.S. economy fueled Tuesday8217;s 3 percent rally.

Bernanke speaks to a central bank conference on Friday in Jackson Hole,Wyoming. Analysts were divided on how much scope the Fed has for further stimulus.

Concerns about the economy8217;s strength and the euro zone8217;s sovereign debt crisis have sparked sharp volatility in the past two weeks,and the magnitude of Tuesday8217;s rally echoed the steep moves.

Samp;P 500 futures fell 11.1 points and were below fair value,a formula that evaluates pricing by taking into account interest rates,dividends and time to expiration on the contract. Dow Jones industrial average futures lost 105 points,and Nasdaq 100 futures sank 19.5 points.

Investors looked ahead to July data on durable goods,seen up 2 percent,reversing a weak June,when orders fell by 1.9 percent. The data is due at 8:30 a.m. EDT 1230 GMT.

Applied Materials Inc is scheduled to report quarterly results later Wednesday.

Bank of America Corp could remain in focus a day after the Dow component fell to 2-1/2-year lows on fears it may have to raise massive amounts of capital. The stock fell 1.6 percent to 6.20 in premarket trading.

Delta Air Lines Inc is expected to order 100 Boeing Co extended-range 737 planes to replace older aircraft,sources said.

U.S. stocks shot higher Tuesday on hopes for Fed action,giving investors hope that a four-week rout was ending. Technology and other growth stocks drove most of the gains,with the Nasdaq rising more than 4 percent.