YAHOO [BRIEFING.COM]: Broad-based buying not only gave stocks their third straight gain, but helped the S&P 500 close at a session high above 1200.

Stocks started the session sharply higher. Participants showed little regard for an Empire State Manufacturing Index that fell to -7.7, which contrasts with the consensus -0.4 reading. The reading suggests that regional activity contracted further since July, when a -3.8 had been posted.

The positive tone to early trade was partially supported by buying abroad. Asia's major averages all advanced markedly amid news that Japan's economy contracted by 1.3% in the second quarter. The drop in GDP wasn't as bad as what some had feared, though. Europe's bourses staged varied gains ahead of a meeting between officials from France and Germany. The notion that the fiscal and financial challenges facing the region will be addressed helped the euro maintain a lead of more than 1% over the dollar during most of the trading day. The yen surrendered its gain against the greenback.

Early strength attracted additional buyers into the fold, but conviction was tested when the S&P 500 reached the 1200 line. Hesitation there opened the door to some selling, but stocks gradually battled back in afternoon trade. Steady, broad-based buying eventually pushed the broad market measure past the psychologically-significant line to close at a session high. Some traders believe the market's ability to close above 1200 and remain there could go toward helping the stock market stage a longer-term recovery after the steep losses suffered in recent weeks. The S&P 500 is already up more than 100 points, or plus 9%, from the intraday low that it set last Tuesday.

While an improved tone to broad market action typically encourages participants to trade and invest in riskier issues, stodgy and defensive-oriented utilities stocks were today's top performers. As a group, utilities climbed 3.5%, even after many market analysts gave sector members a nod for their steady business models and relatively robust dividend yields during the volatility of the past few weeks.

Energy stocks weren't far behind, however. Collectively, they climbed 3.4%. Drillers were especially strong after Transocean (RIG 57.27, +1.66) announced plans to acquire Norway-based Aker Drilling. Higher oil prices helped the sector, too; the energy component closed pit trade almost 3% higher just shy of $89 per barrel.

Google (GOOG 552.79, -10.98) helped heat up the handset and telecommunications space with a deal of its own. The tech giant announced that it will pay $40 per share for Motorola Mobility (MMI 38.21, +13.74). The offer represents a premium of more than 60% above MMI's closing price last week.

Sept crude oil ended higher by 2.9% to $87.88 per barrel, aided by the rally in equities. Today's highs, at $88.05, mark crude oil's best in five sessions. Sept natural gas finished lower by 0.9% to $4.02 per MMBtu, in what was an uneventful session.

Dec gold gained 0.9% to settle at $1757.90 per ounce, while Sept silver rallied for 0.7% to finish at $39.38 per ounce. Gold futures snapped a two session losing streak, while silver futures extended its move higher to second consecutive session. Weakness in the dollar aided the precious metal's moves to the upside.

Advancing Sectors: Utilities +3.5%, Energy +3.4%, Financials +3.2%, Telecom +2.3%, Industrials +1.8%, Health Care +1.8%, Tech +1.8%, Materials +1.5%, Consumer Staples +1.4%, Consumer Discretionary +1.4%
Declining Sectors: (None)DJ30 +213.88 NASDAQ +47.22 NQ100 +1.5% R2K +3.0% SP400 +2.7% SP500 +25.68 NASDAQ Adv/Vol/Dec 2132/1.94 bln/499 NYSE Adv/Vol/Dec 2838/1.11 bln/270