NEW YORK – A surprisingly strong report on the housing market and the prospect of more cash for the International Monetary Fund to fight off a financial crisis powered stocks Wednesday to their highest close since last summer.

The Standard & Poor’s 500 index closed above 1,300 for the first time since July 28, and the Dow Jones industrial average finished at its highest since July 25. That was just before the bitter fight in Washington over the federal debt limit.

It was also the first time since Jan. 3, the first trading day of the year, that the S&P 500 moved more than 1 percent. The market has made a quiet ascent since then. The S&P is up 4 percent for the year, the Dow 3 percent.

“We think things are setting up to be better than last year,” said Brad Sorensen, director of market research at Charles Schwab. “The worst-case scenario is off the table.”

The National Association of Home Builders index, a measure of sentiment among builders, rose to its highest level since June 2007 as sales jumped. Analysts said it could be a sign the housing market has bottomed out.

The index is rising because builders are seeing a rise in people shopping for a home, not because they are seeing more sales, at least not yet. Those in a position to buy are benefiting from lower prices and mortgage rates.

Stocks of home construction companies jumped. PulteGroup Inc. rose 6 percent, Toll Brothers Inc. rose 5 percent, and KB Home rose 8 percent.

In another encouraging sign, the Federal Reserve said manufacturing rose 0.9 percent from November to December, the biggest gain since December 2010.

Christine Lagarde, managing director of the IMF, said the fund wanted to raise $500 billion more to lend to countries. The IMF has put up roughly a third of the rescue loans to debt-hobbled European countries over the past two years.

Investors are eager for signs that the world can contain Europe’s debt problem. Besides an already likely recession in Europe, a messy default by Greece or another country could lead to a financial crisis around the globe.

In other trading, Goldman Sachs stock added almost 7 percent after its quarterly profit beat Wall Street expectations. Net income still fell 58 percent in the last three months of 2011, a result of choppy financial markets.

Some bank stocks followed Goldman higher. Morgan Stanley, another investment bank, rose 6.8 percent. Bank of America rose 4.9 percent, JPMorgan Chase 4.7 percent and Citigroup 2.9 percent.

Other financial stocks sank after disappointing earnings reports. State Street Corp. plunged 6.6 percent, the largest fall in the S&P 500. PNC Financial Services Group Inc. fell 2.6 percent, and Northern Trust Corp. slipped 2 percent.

The Dow finished up 96.88, or 0.8 percent, at 12,578.95. The S&P rose 14.37, or 1.1 percent, to 1,308.04. The Nasdaq composite index, which has outperformed the other two this year, rose 41.63 points, or 1.5 percent, to 2,769.71.

Among other stocks making large moves Wednesday:

• Yahoo climbed 3 percent on news that co-founder Jerry Yang is leaving the struggling Internet pioneer. The departure clears the way for newly hired CEO Scott Thompson to take more radical action to shake up the company.

• Amphenol Corp., which makes fiber-optic cables, soared 11 percent. Its earnings that beat analysts’ expectations, and the company said strong orders should push next year’s earnings above Wall Street forecasts.

• Linear Technology Corp., which makes circuits, jumped 11 percent, most in the S&P 500. It expects quarterly revenue to rise 4 to 8 percent following strong demand in December and January. It also raised its dividend by a penny to 25 cents a share.

• Cash America International Inc., a payday lender and operator of pawnshops, sank 6 percent after cutting its earnings forecast.

WASHINGTON (Reuters) – The Securities and Exchange Commission is warning staffers that their personal brokerage account information may have been compromised, after it uncovered security flaws with an ethics compliance program.

The SEC put the program in place after its internal watchdog raised concerns about possible insider trading among SEC staffers.

In an October 7 letter to SEC employees, Chief Information Officer Thomas Bayer said that the contractor hired to operate a computer program that tracks trades had violated its agreement with the SEC by providing names and account numbers to a subcontractor without permission.

"We are not aware of any actual misuse of the data," Bayer wrote. "Nevertheless, it is the SEC's policy to provide notification of any incident that presents the potential for unauthorized access to personal information."

The SEC said employees should consider placing a fraud alert on their credit files. The agency also said it will offer employees a free year of credit monitoring.

The contractor, Financial Tracking Technologies LLC, was selected by the SEC in the second quarter of 2009 to set up the new ethics system.

The changes came after the agency's inspector general, David Kotz, issued a March 2009 report alleging that two agency employees possibly engaged in insider trading.

Although no civil or criminal actions have resulted from that report, it prompted a major shake-up in how the SEC tracks the trades of its employees.

In a May 2009 announcement, SEC Chairman Mary Schapiro called for the SEC to have a "world class compliance program" to help prevent "not only an actual impropriety, but the appearance of one as well."

In addition to developing the computer system now the subject of the security breach, the agency also issued new internal rules requiring the preclearance of all trades and prohibiting the trading in securities of any company under investigation.

According to the SEC's letter to employees, the Office of Information Technology initiated on September 16 a security review that discovered FTT had failed to comply with contractual obligations.

Bayer said the SEC had directed FTT to "immediately terminate all access to SEC systems" by the unauthorized parties.

Anthony Turner, the principal at Financial Tracking Technologies, could not be immediately reached for comment.

SEC TIPPED OFF

SEC spokesman John Nester said the agency first learned of the possible breach after a former FTT employee came forward with concerns about how the data was being handled.

The SEC's IT office found that since June 2009, FTT had engaged one or more consultants and subcontracted with a global technology and business services firm.

The SEC said FTT had given those firms access to personal data without notifying or seeking approval from the market regulator. As a result, none of those third parties had been properly vetted.

Since September, the system has been offline and employees have been getting preclearance for their trades by sending emails to the SEC's ethics office.

Nester said no decision has been made yet on whether or not the SEC will keep its contract with FTT.

The letter to staff did not identify the third parties and the SEC declined to identify them for Reuters.

(Reporting by Sarah N. Lynch; Editing by Tim Dobbyn)

NEW YORK – Major stock indexes edged higher Friday, putting the market on track for a fifth day of gains. The increases were limited by more indecision in Europe over how to resolve that region’s debt troubles.

European finance ministers rejected calls by Treasury Secretary Timothy Geithner to provide a decisive solution that would help Greece avoid a default on its debt. Traders fear that a default would rattle European banks that hold Greek debt and roil financial markets.

Blackberry maker Research in Motion Ltd. lost nearly one-fifth of its value after reporting sharply lower revenue and income. The company faces stiff competition from Apple Inc.’s iPhone and phones that use Google Inc.’s Android software.

At 2:14 p.m. Eastern time, the Dow Jones industrial average was up 61 points, or 0.5 percent, to 11,494. The Standard & Poor’s 500 index rose 4, or 0.4 percent, to 1,213. The Nasdaq composite index rose 7, or 0.3 percent, to 2,614.

The leader of the European finance ministers’ meeting said that the group would not decide until next month whether Greece has qualified for its next round of bailout money. Investors had been hoping the question would be decided sooner.

Analysts said some stock-sellers were pocketing profits after a week that lifted shares nearly 5 percent. Antony Conroy, head trader for BNY ConvergEx Group, said traders’ sentiment is mixed, with some buying undervalued stocks and others selling on long-term concerns about Europe.

“Even though we’ve had a good couple of days, people still believe there’s a good chance that the credit crisis in Europe is going to cause something like a 2008 event,” he said.

Stocks rose every day this week, their first four-day winning streak since August. The rally lifted the Dow and the S&P by about 5 percent. The Dow is still down 1 percent for the month, the S&P 0.3 percent.

Research in Motion said after the market closed Thursday that it lost ground against competitors in the three months ended Aug. 27. The company sold far fewer tablets and phones, struggling in a category dominated by the iPhone and iPad.

The troubled company has lost more than half of its market value this year. RIM said July that it would lay off 2,000 workers, about 10 percent of its work force.

Stocks have not risen for five days in a row since nearly three months ago, before nervousness about the sluggish economy and Europe sent shares falling.

Markets surged on Thursday after five central banks said they would offer unlimited dollar loans to the European banks. Some banks have been unable to borrow to pay for their daily operations. They can’t get loans from other banks because no one knows how much bad debt they hold.

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Daniel Wagner can be reached at http://www.twitter.com/wagnerreports.