Stocks finished higher in relatively thin trading Wednesday, led by the energy sector and following a pair of better-than-expected economic reports, but investors remained cautious ahead of the two-day EU summit later this week.

The Dow Jones Industrial Average extended its gains for a second day, jumping 92.34 points, or 0.74 percent, to finish at 12,627.01, led by JPMorgan and BofA .

The S&P 500 advanced 11.86 points, or 0.90 percent, to end at 1,331.85. The Nasdaq gained 21.26 points, or 0.74 percent, to close at 2,875.32.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, ended below 20.

Most key S&P sectors closed in positive territory, led by energy and financials.

“Europe is a place where there’s still a lot of room for negative developments ,” said Joseph Trevisani, chief market strategist at Worldwide Markets on CNBC’s “ Squawk Box .” “I don’t think the market grasps that the Germans are going to let this play out—they’re not going to come in and rescue the euro zone.”

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