DOW - higher for a third-consecutive

Dow 12,261.42 +72.73 +0.60%

By: JeeYeon Park
CNBC News Associate

Stocks closed higher for a third-consecutive session Wednesday, led by banks, amid end-of-quarter window dressing and after the Greek parliament approved austerity measures to avoid a debt default.

The Dow Jones Industrial Average rallied 72.73 points, or 0.60 percent, to close at 12,261.42. The blue-chip index dipped into negative territory at the beginning of the session.

The S&P 500 rose 10.74 points, or 0.83 percent, to end at 1,307.41.

The tech-heavy Nasdaq gained 11.18 points, or 0.41 percent, to finish at 2,740.49.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, tumbled 10 percent to end near 17.

The Dow and Nasdaq are on track for their best weekly gains in three months, while the S&P is on pace for its biggest one-week gain since Nov. 2010. However, all three major indices are still on pace for their biggest monthly loss since last August.

Volume was still on the lighter side with the consolidated tape of the NYSE at 3.37 billion shares, while 892 million shares changed hands on the floor.

Greece's parliament approved a five-year austerity plan with 155 votes in favor and 138 votes against. It must now win approval on Thursday for legislation detailing specific implementation measures for the 28 billion austerity package.

If the second vote passes, release of the loan tranche could be approved by finance ministers on Sunday. The euro gained against the dollar.