the S&P 500 rose to its highest since late 2007, and that could prompt investors to lock in recent gains, analysts said.
Reflecting the complacency, the CBOE Volatility index , Wall Street's so-called fear gauge, fell 7.4 percent. The VIX usually moves inversely to the S&P 500 as it is used as a hedge tool against further market decline.
Economic data from China provided some support to the market, though the focus remained on U.S. corporate earnings. The country's economy grew at a modestly faster-than-expected 7.9 percent in the fourth quarter, the latest sign the world's second-biggest economy was pulling out of a post-global financial crisis slowdown which saw it grow in 2012 at its weakest pace since 1999.
General Electric reported a better-than-expected rise in earnings, spurred by robust demand in China and oil-producing countries. Shares were up 3.2 percent at $21.99.
Despite the gains by Morgan Stanley, financial stocks sagged as Capital One Financial reported disappointing profit. Capital One slumped 7.7 percent to $56.87, while the KBW bank index slipped 0.9 percent.