US STOCKS-Banks lead Wall St up, appetite for equities rises

* Portuguese bond sale eases sovereign debt worries

* Agricultural companies gain on spike in food prices

* Comments on JPMorgan dividend lift banking shares

* Indexes up: Dow 0.7 pct, S&P 0.9 pct, Nasdaq 0.8 pct

* For up-to-the-minute market news see [STXNEWS/US]
(Updates to close)

By Ryan Vlastelica

NEW YORK, Jan 12 (BestGrowthStock) – U.S. stocks (Read more about the stock market today. ) ended solidly
higher on Wednesday after European debt fears eased and sparked
a broad advance, led by banks and commodity-related shares.

Investors expect further flows into equities on speculation
the economy will strengthen. About seven stocks rose for every
three that fell on the New York Stock Exchange.

Sectors typically helped by rising inflation, including
agricultural and energy, were strong. Seed company Monsanto Co
(MON.N: ) rose 3.3 percent to $74.92 while Exxon Mobil Corp
(XOM.N: ) gained 1.2 percent to $76.58.

Banks were led by JPMorgan Chase & Co (JPM.N: ), which rose
2.5 percent to $44.71 after its chief executive said the bank
could increase its dividend once the Federal Reserve gives its
approval. For details, see [ID:nN11151339]

Eric Marshall, director of research at Hodges Capital
Management in Dallas, Texas, said that money leaving the bond
market “is slowly coming back into equities. This is really
about the first time in three years we’ve seen outflows out of
bond funds.”

A healthy bond auction in Portugal drove investors into
riskier assets. Investors were hopeful euro-zone finance
ministers would beef up the European Union’s rescue fund.

“Europe has kept people from becoming more bullish than
they would be otherwise, and the demand in the auction sets a
positive tone going forward,” said Bill Stone, chief investment
strategist at PNC Wealth Management in Philadelphia.

The overseas auction fed risk appetite and contributed to a
drop in U.S. Treasuries and municipal bonds. [ID:nN12215953]

Agricultural stocks rallied after a U.S. government report
said U.S. stockpiles of corn and soybeans would be drawn down
to surprisingly low levels, lifting food prices and
agricultural shares. [ID:nN12190436]

The Dow Jones industrial average (.DJI: ) was up 83.48
points, or 0.72 percent, at 11,755.36. The Standard & Poor’s
500 Index (.SPX: ) was up 11.47 points, or 0.90 percent, at
1,285.95. The Nasdaq Composite Index (.IXIC: ) was up 20.50
points, or 0.75 percent, at 2,737.33.

JPMorgan is expected to report its quarterly results on
Friday. Intel Corp (INTC.O: ), another Dow component, is
scheduled to report after the market closes Thursday.

The S&P is almost 9 percent higher since the start of
December, in part on bets that earnings would be strong. While
early results have suggested that optimism was justified, some
analysts say it may be hard for equities to rise much further
given recent gains.

“Sentiment has gotten heavily bullish, and eventually that
will weigh on us,” said Stone, who helps oversee $105 billion
at PNC. “I don’t think we’ll get a correction, but a pullback
or pause seems likely.”

Also lifting banks on Wednesday was Wells Fargo, which
raised the U.S. bank sector to an “overweight” rating, citing a
decline in credit costs and positive loan growth.

ITT Corp (ITT.N: ) surged 16.5 percent to $61.50 after the
diversified manufacturer said it would separate its businesses
into three publicly traded companies, and shareholders will own
shares in all three. [ID:nN12245683]

The stock was the top performer on the PHLX defense sector
index (.DFX: ), which rose 1.8 percent.

(Reporting by Ryan Vlastelica; Editing by Kenneth Barry)