Stocks Rise on Optimism for Corporate Earnings

"Today's rally marks one of the sharpest two-day rallies in the SPX since 2008, but despite being short-term overbought, the success in closing above December highs in the major indices should likely help prices rally through end of week before any short-term top is in place," Newton said in a note.

Dan Greenhaus, chief global strategist at BTIG, issued a note saying fourth-quarter S&P 500 company growth estimates have steadily come down from September, and have been even lower excluding financials.

Greenhaus said a major reason for the drop in estimates is expectations that the tech sector may take a hit from Apple(AAPL) . Expectations are that the tech giant may suffer a rare year-over-year drop in quarterly earnings.

During this earnings season, investors will also be watching for corporate commentary on whether fourth-quarter profits suffered any collateral damage from the "fiscal cliff" battle.

Alcoa reported in-line fourth-quarter earnings of 6 cents a share on revenue of $5.9 billion, which beat top-line estimates. Analysts expected profit of 6 cents a share on revenue of $5.6 billion. Shares of Alcoa dipped 0.22%.

The company said it expected to be in a good position for 2013 on global demand growth in aluminum amid a pickup in the Chinese economic recovery.

"Such anecdotal signs that the belly of the Chinese dragon is starting to rumble again will not go unnoticed by investors around the world," said Andrew Wilkinson, chief economist strategist at Miller Tabak.

During an interview with CNBC on the company's earnings, Alcoa CEO Klaus Kleinfeld warned that the U.S. must resolve debt ceiling issues or see the destruction of market confidence.

No major U.S. economic releases were published Wednesday.

Gold for February delivery slid Wednesday by $6.70 at $1,655.50 an ounce at the Comex division of the New York Mercantile Exchange, while February crude oil contracts fell 5 cents to finish at $93.56 a barrel.

The benchmark 10-year Treasury was up 1/32 to dilute the yield to 1.867%. The dollar was up 0.24%, according to the U.S. dollar index.