Bank stocks lead the market higher

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NEW YORK (CNNMoney) Stocks had a rough start this week, but the market seems to be finding its footing thanks to strong bank earnings.

The Dow Jones industrial average, the S&P 500 and the Nasdaq were all higher Wednesday, extending Tuesday's gains. The S&P 500 is within a few points of erasing its losses for the year.

CNNMoney's Tech 30 index was also higher, with Twitter (TWTR) and Apple (AAPL, Fortune 500) both up in early trading.

Bank of America (BAC, Fortune 500) boosted investor confidence by reporting better-than-expected earnings and revenue for the fourth quarter. The report follow solid earnings figures Tuesday from JPMorgan (JPM, Fortune 500) and Wells Fargo (WFC, Fortune 500). Shares of Bank of America rose on the news, as did major banks that have yet to report such as Goldman Sachs (GS, Fortune 500) and Citigroup (C, Fortune 500).

The financial sector is expected to have the best profit growth in the fourth quarter, according to FactSet Research. Overall, earnings for the companies in the S&P 500 are expected to be up 6.1% versus the fourth quarter of last year.

In economic news, producer prices increased 0.4% in December, the government said. Manufacturing activity in the New York area expanded at a rapid pace in January, according to the Federal Reserve Bank of New York. At 2:00 p.m., the Federal Reserve will release the latest edition of its Beige Book report, a compilation of data on regional economies.

Wednesday's reports "added to renewed market optimism," following solid December retail sales and business inventories data on Tuesday, said Michael Englund, an economist at Action Economics. Despite an unexpected slowdown in hiring last month, "the bulk of U.S. economic surprises remain upward," he added.

General Motors (GM, Fortune 500) shares fell even though the automaker announced on Tuesday that it will pay its first dividend since 2008. The stock was down because the company said Wednesday morning that it expects 2014 profit margins to be similar to last year and that restructuring costs for fixing problems in Europe are expected to be about $1.1 billion. The automaker also predicted most growth globally for the industry this year.

But shares of electric automaker Tesla Motors (TSLA) surged again after CEO Elon ! Musk told CNN late Tuesday that the company is on track to produce a cheaper, mass-market car in three years and still plans to offer a full-size pickup similar to the Ford (F, Fortune 500) F-150 in four to five years.

Shares of 3D printer maker ExOne (XONE) fell sharply after it warned late Tuesday that revenue would be far below its earlier forecasts. The warning follows disappointing guidance from 3D printer maker Stratasys (SSYS) earlier in the day. Fellow 3D printer companies 3D Systems (DDD) and Voxeljet (VJET) were down in early trading as well.

The main European stock market indexes were all up Wednesday afternoon. Burberry (BBRYF) shares surged in London after the luxury retailer reported a 14% jump in retail revenue in the third quarter, which includes the holiday season. Asian markets mostly closed the day with gains.