U.S. stocks closed higher on Wednesday, snapping a five-day losing streak, as strong start of earnings season and Federal Reserve's Beige Book boosted investors' optimism.

The Dow Jones industrial average gained 89.46 points, or 0.70 percent, to 12,805.39. The Standard & Poor's 500 was up 10.12 points, or 0.74 percent, to 1,368.71. The Nasdaq Composite Index advanced 25.24 points, or 0.84 percent, to 3.016.46.

Alcoa kicked off the earnings season with better-than-expected results. The aluminum maker made a profit of 10 cents per share in the first quarter, which beat the estimates of a loss of 4 cents per share. Revenue also beat expectations at 6 billion dollars. Its shares surge more than 6 percent on Wednesday's trading.

The strong earnings report eased investors' concerns about the economic slowdown and set the tone for the upcoming earnings reports for the first quarter. JP Morgan and Wells Fargo are also scheduled to release earnings reports this week.

The Federal Reserve believed that the U.S. economy continued to grow at a "modest to moderate pace"from February to March, according to the Fed's Beige Book. It seemed to the investors that the Fed would not launch another round of quantitative easing policy.

Among all the sectors, financials led Wednesday's gain. Bank of America gained more than 3 percent after Guggenheim upgraded its rating on the financial giant to "buy" from "neutral." Morgan Stanley also climbed after Evercore Partners raised its price target on the firm to 20 dollars a share.

On the economic front, U.S. Labor Department said import prices rose 1.3 percent in March, logging its biggest gain in nearly a year. Weekly mortgage applications slipped last week as refinancing demand declined, according to the Mortgage Bankers Association.

Meanwhile, Spanish and Italian bonds yields declined on Wednesday. Also, the European Central Bank said the bank's bond- buying program remains an option as the euro zone continues to struggle to contain its debt crisis, helping to ease investors' concerns about the European debt crisis.

On other markets, oil prices climbed as data showed that U.S. domestic fuel stocks fell more than expected last week. The dollar slipped as risk-aversion appetite faded, while the gold price also retreated.