US stocks rose on Wednesday as a billion dollar deal in the struggling homebuilding sector buoyed investor sentiment. Shares also gained after US Treasury agreed to extend TARP funds to the ailing life insurance industry.

The Dow Jones Industrial Average rose 47.55 points or 0.61% to finish at 7,837.11. The S&P 500 climbed 9.61 points or 1.18% to end at 825.16. The Nasdaq Composite jumped 29.05 points or 1.86% to 1,590.66.

Stocks briefly came under pressure during the intraday session after minutes from the Fed's most recent meeting revealed that members of the central bank’s Open Market Committee remain concerned about "downside risks to an already weak outlook for economic activity".

Pulte Homes Inc. (NYSE: PHA), one of the largest US homebuilder, agreed to acquire rival Centex Corp. (NYSE: CTX) in a stock-for-stock deal valued at $1.3 billion. The merger of the two companies would create the largest US homebuilder. Shares of Centex Corp. rallied $1.44 or 18.90% to $9.06. Pulte Homes climbed 90 cents or 6.92% to $13.90.

Shares of Alcoa Inc. (NYSE: AA) jumped 27 cents or 3.47% to $8.06. After the closing bell on Tuesday, the largest US aluminum maker announced that it swung to a first-quarter loss of $497 million, or 61 cents a share, compared to a profit of $303 million, or 37 cents a share, in the prior year period.

Among financials, American Express (NYSE: AXP) soared 71 cents or 4.73% to $15.72. JP Morgan (NYSE: JPM) gave up 95 cents or 3.37% to $27.25. On the other hand, Bank of America (NYSE: BAC) slumped 30 cents or 4.08% to $7.06. Citigroup (NYSE: C) lost 6 cents or 2.17% to close at $2.70.

Shares of life insurers advanced after U.S. Treasury Department said that they are eligible for capital injections under TARP, and applications are under review. Shares of Lincoln National Corp. (NYSE: LNC) skyrocketed $2.26 or 32.80% to $9.15.Principal Financial Group Inc. (NYSE: PFG) jumped $2.16 or 21.28% to $12.31.Hartford Financial Services Group Inc. (NYSE: HIG) rallied $1.14 or 13.49% to $9.59.

Meanwhile, Securities and Exchange Commission on Wednesday approved the release of five different proposals for reintroduction of uptick rule in order to curb naked short selling.

Technology stocks finished mostly higher. IBM (NYSE: IBM) rose $2.44 or 2.47% to $101.19. Microsoft Corp. (NASDAQ: MSFT) increased 43 cents or 2.29% to $19.19.Juniper Networks (NASDAQ: JNPR) added $1.89 or 12.10% to end at $17.51 after it announced that it expects to report lower-than-expected expenses for the first quarter.

Shares of embattled automaker General Motors Corp.