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So much for the selloff that began the week: Stocks surged on Wednesday for the second day in a row, driving the Dow Jones industrial average to a fresh five-year high.

The Dow closed at 14,075.37, up 175.24 points or 1.3 per cent, or more than 290 points over the past two sessions. The broader S&P 500 closed at 1515.99, up 19.05 points or 1.3 per cent – after falling to a one-month low during Monday's slide. In Canada, the S&P/TSX composite index closed at 12,732.39, up 71.95 points or 0.6 per cent.

The volatility of the past several trading sessions has followed up-and-down views on U.S. economic stimulus and the European sovereign-debt crisis.

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The recent release of minutes from the last Federal Reserve monetary policy meeting had raised concerns that the central bank is growing concerned about the impact of ongoing asset buying, or quantitative easing – fuelling fears that the stimulus could end sooner than expected.

Yet, Fed chairman Ben Bernanke has attempted to smooth over these concerns in Congressional testimony. On Wednesday, Mr. Bernanke reiterated his belief that the Fed must keep interest rates low while the economy heals. That followed a defence on Tuesday of the Fed's asset-buying program.

In Italy, a successful auction of five- and 10-year government bonds eased concerns about a flareup of the sovereign debt crisis. This was the first auction since election results raised concerns that the country could veer from austerity measures.

Meanwhile, the U.S. produced some upbeat economic numbers. Durable goods orders in January, after stripping out transportation items, rose 1.9 per cent – the biggest gain in a year, topping expectations.

As well, pending home sales rose 4.5 per cent, also beating forecasts.

Apple Inc. fell 1 per cent after concluding its annual shareholder meeting. Chief executive Tim Cook addressed concerns that the company is sitting on too much cash – cash that hedge fund manager David Einhorn insists should be returned to shareholders – but did not provide any details other than saying Apple's board is in "very very active" discussions about the matter.

After markets closed, Groupon Inc. reported a revenue outlook that again disappointed the Street. Shares plunged more than 20 per cent.

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Target Corp. fell 1.5 per cent after its fiscal fourth-quarter earnings fell 2 per cent over last year.

First Solar Inc. fell 13.8 per cent after saying that its "expected revenue" fell 15 per cent last year.

Dollar Tree Inc. surged 10.5 per cent, standing out as the biggest gain within the S&P 500, after it reported upbeat fourth-quarter results. Earnings on a per-share basis jumped more than 26 per cent while consolidated net sales rose more than 15 per cent.

Among commodities, gold fell to $1595.70 (U.S.) an ounce, down $19.80. Crude oil rose to $92.76 a barrel, up 13 cents. Suncor Energy Inc. rose 0.4 per cent and Barrick Gold Corp. fell 1.3 per cent.

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