U.S. stocks managed steady gains Wednesday, with bank shares boosting the broader market following Bank of America’s $8.5 billion settlement over mortgage securities claims.

Stocks started the session higher following Greece’s approval of austerity measures, which are meant keep the country from defaulting.

“Some of the clouds that have hung over this market have let up,” said Bruce McCain, chief investment strategist with Key Private Bank. “The Greek issue isn’t resolved, but one forward step was taken and it gets rid of a bit of that uncertainty — and you can say the same thing for BofA.”

The Dow Jones industrial average rose 80 points, or 0.7%. Bank of America was the biggest gainer on the blue-chip index, with shares rising 3% after the bank announced a multi-billion-dollar settlement.

Other banks stocks followed suit, with shares of Citigroup, Wells Fargo and JPMorgan Chase all moving higher during midday trading.

The S&P 500 gained 11 points, or 0.8%; and the Nasdaq Composite added 14 points, or 0.5%.

Metals and industrial stocks were also strong Wednesday. US Steel was the top performer on the S&P 500, rising 7%, after the company was upgraded to “buy” by Deutsche Bank analysts.

Competitor AK Steel was the second-best performer on the index, up 6.5%

“The mood in the last few days has shifted in the market,” McCain said. “You have shares of risk-heavy companies coming back, and there’s a return of some optimism among investors — particularly as the quarter ends this week and we head into earnings season next month.”

Greece’s vote on Wednesday follows a prolonged debate of whether the country should adopt severe spending cuts and tax increases, in exchange for a financial aid package from the European Union and the International Monetary Fund.

While Greece may have addressed its fiscal situation — at least for the moment — there are plenty of other debt-stricken eurozone countries to worry about. And the U.S. economy is still not on solid ground.

“The market hasn’t gone anywhere for the last six months, and I can’t see any way that we’ll break out of this range unless there’s significant improvement in growth and employment,” said Mic Mills, head of electronic trading at ETX Capital.

U.S. stocks rallied on Tuesday, with the Dow jumping 145 points, as investors cheered a report showing that home prices rose in April — the first time in eight months.

Commodities: Energy and metal commodities rallied Wednesday, with oil prices surging after the Energy Department reported a bigger-than-expected drop in oil inventories.

Oil for August delivery gained $2.34, or 2.5%, to $95.19 a barrel.

Gold futures for August delivery rose $5.80 to $1,505.80 an ounce; while silver rallied 3% to $34.66 an ounce.

Industrial-grade copper futures were also higher, rising 2.5% to $4.21 a pound

Economy: The National Association of Realtors said that pending home sales rose a better-than-expected 8.2% in May, recovering in part from April’s dismal 11.6% decline.

Companies: Family Dollar Store reported quarterly earnings before the market open that missed Wall Street expectations, sending shares of the company 3% lower.

KB Home shares sank 9%, after the homebuilder reported a second quarter loss.

Monsanto’s earnings widely beat expectations, which the company attributed to strength in its seeds business. Shares of Monsanto rose 5%.

World markets: European stocks closed sharply higher following Greece’s austerity vote. Britain’s FTSE 100 rose 1.5%, the DAX in Germany surged 1.7% and France’s CAC 40 rallied 1.9%.

Asian markets ended the session mixed. The Shanghai Composite slipped 1.1%, while the Hang Seng in Hong Kong was flat and Japan’s Nikkei gained 1.5%.

Currencies and Bonds: The dollar weakened against the euro, the British pound and the Japanese yen.

The price on the benchmark 10-year U.S. Treasury edged lower, pushing the yield up to 3.12% from 3.04% late Tuesday.

Copyright CNN 2011

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