U.S. stocks rallied on Wednesday, with the S&P 500 clearing 2014 losses and closing at a record, as data cast an upbeat light on manufacturing in the New York region and Bank of America reported earnings and revenue that topped Wall Street's expectations.

"We have strong economic momentum coming into the new year. Stocks are no longer cheap, but they are not overvalued," said Kate Warne, investment strategist at Edward Jones. "With the momentum we're seeing in the economy, even the interest-rate-sensitive sectors can absorb it," she added.

Wall Street continued its surge after the release of the Federal Reserve's , which found the economy to be expanding at a moderate pace, with some districts reporting a pickup in growth.

"People think the economy is on fairly good ground here, and they are starting to pile in; equities are largely under-owned, and people are getting statements from last year and starting to allocate to equities," said Joe Costigan, director of equity research at Bryn Mawr Trust.

Bank of America rose after the lender reported fourth-quarter earnings and revenue that topped estimates. Tesla Motors climbed after CEO Elon Musk said the electric-car maker expects to ship its first Model S vehicles to China in March. Apple gained after China Mobile said advance orders for iPhones had hit 1 million, and remained higher as the consumer-technology company

"For those suggesting the market 'needs' earnings growth or something along those lines, we'd point out that is exactly what is occurring," emailed Dan Greenhaus, chief strategist at BTIG, who added that fourth-quarter earnings should come in roughly 23 percent ahead of fourth-quarter results from 2012.

Data Wednesday showed manufacturing in the New York region increasing in January, with the Federal Reserve Bank of New York's economic index rising to 12.51.

Another report had U.S. wholesale prices rising in December, with inflation pressures remaining benign.