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“We’ll see something closer to 4 percent by the back end of the year,” Orlando said. In his weekly outlook the strategist also noted the S&P 500 “will approach or exceed” 1,450 by year end.
Apple, meanwhile, gained after news CEO Steve Jobs would offer the keynote speech at the iPhone maker's annual worldwide developers conference on June 6. The company will be unveiling several software developments at the conference.
Dell advanced after the tech giant announced it is searching for acquisitions to strengthen its data center business.
Goldman Sachs gained after JPMorgan upgraded the investment firm to "overweight," citing overreaction to a report by a U.S. Senate panel and prospects for future business. Goldman was also in the news on Tuesday after a Wall Street Journal report that the bank had given Libya a chance to be a big shareholder during the financial crisis.
In M&A news, Ashland jumped to a 52-week high after news the company would pay about $3.2 billion for International Specialty Products.
Massey Energy gained despite pressure from shareholders to block the company's purchase by Alpha Natural Resources, saying the deal would allow the coal company's directors to avoid responsibility for the April 2010 mine explosion that killed 29 miners. The shareholders have asked a judge to block the acquisition.
Anadarko Petroleum rose after Wells Fargo said it expects the stock to rise once the oil company is able to fill "pent-up demand." The brokerage raised its price target on the stock to about $100 a share from $84.
Meanwhile, solar stocks surged after reports that Germany planned to close all of its nuclear reactors by 2022. LDK Solar, GT Solar and and First Solar all gained.
Fertilizer companies gained after a report by Citigroup that said some companies will benefit from fewer Chinese exports and a delay in U.S. plant. The brokerage upgraded Mosaic and Potash to "buy" from "hold," and raised Mosaic's price target to $85 a share from $84 and Potash's to $67 a share from $61.
Fertilizer company Agrium also gained.
On the IPO front this week, Sabre Industries plans to offer 7 million shares at $12 to $14 each to raise about $91 million. The engineered products provider is expected to trade on the Nasdaq under the symbol "SABR."
One economic report after another pointed to weakness in the U.S. economy Tuesday after the Conference Board's May reading on consumer confidence fell to a six-month low at 60.8 from 66.0 in April. Economists surveyed by Reuters had expected the index to rise to 66.5.
Also, the Chicago Purchasing Managers Index fell to 56.6 in May from 67.6 in April. Economists surveyed by Reuters had expected the index to fall to 62.6.
And prices for U.S. single-family homes sank to a new low for the year, providing clearer evidence of a double-dip in housing. The S&P/Case Shiller composite index of 20 metropolitan areas fell 0.2 percent in March from the month before, which was in line with expectations.
Investors are also looking ahead to the government's monthly nonfarm payroll figures at the end of the week. The widely-watched jobs report is expected to show nonfarm payrolls increased by 180,000 jobs in May, according to a Reuters survey, down from the 244,000 created in April. The May unemployment rate is projected to slip to 8.9 percent, after the rate gained to 9.0 percent.
Asian stocks gained on a more upbeat outlook from manufacturers in Japan.