What drove the market?

U.S. stocks closed higher for a fourth session Wednesday, with the S&P 500 in its longest winning streak since Sept. 14, on reports that the U.S. and China have narrowed differences over trade. Bloomberg reported that cited White House sources saying President Donald Trump was eager to see a China deal helped to drive gains for stocks.

However, ratings company Fitch warned that the U.S. could lose its triple-A sovereign credit rating if government dysfunction leads to brinkmanship over the country's debt limit. The warning came as a partial U.S. government shutdown continued and after a televised speech Tuesday night by Trump failed to narrow differences between the White House and Democrats over the administration's demand for funding to build a wall on the U.S.-Mexico border.

Minutes from the December's Federal Open Market Committee meeting, which indicated caution on future interest rate hikes, also helped to buoy sentiment. The release of Fed minutes revealed that some central-bank officials hard reservations about an interest-rate increase last month due to market volatility, though policy makers voted unanimously in favor of the move. They also recommended the Fed should be "patient" and stressed that "a relatively limited amount of additional tightening" is appropriate.

What were analysts saying?

Larry Benedict, CEO of the Opportunistic Trader, told MarketWatch that "we're in the midst of a buy panic. Investors are pricing in all good news on all fronts," and shrugging off the negative. Benedict warned that the nearly 10% jump in the S&P 500 since Dec. 24 puts markets "at fair value right now, and maybe a little high," a dynamic that could set stocks up for a fall in the event of bad news on the trade front or as earnings season begins.

Jasper Lawler head of research at London Capital Group said in a note, The extension of U.S.-China trade talks to a third day was "interpreted by the markets as a sign of progress." "Comments coming from both parties continue to indicate that the talks are, so far going ‘very well.' A deal is likely to still be a long way off, with many twists and turns still to overcome along the way," he said. "However, the extension is a step in the right direction, sending a signal that the two sides are in serious negotiations and are working hard to resolve the issues."

How did major benchmarks fare?

The Dow Jones Industrial Average DJIA, +0.39% DJIA, +0.39% rose 91.67 points, or 0.4%, to 23,879.12, its best series of gains since Nov. 8, while the S&P 500 SPX, +0.41% climbed 10.55 points, or 0.4%, to 2,584.96. The Nasdaq Composite Index COMP, +0.87% advanced 60.08 points, or 0.9%, to 6,957.08.

Which stocks were in focus?

Apple Inc. AAPL, +1.70% shares rose 1.7%. Reports indicated that the tech behemoth was set to cut iPhone production by 10% this quarter. But Chief Executive Tim Cook, during a CNBC interview on Tuesday, described the long-term health of the company as "never been better," and said the ecosystem around the company's roster of products has "never been stronger.

source: MarketWatch