Several bellwethers hit 52-week highs, including Apple Inc and Cisco Systems Inc, while Caterpillar Inc led the Dow industrials higher after its price targets were raised on expectations of strong longer-term growth.
Some investors saw a report from the National Association of Realtors on February home sales as a sign of stabilization, especially considering the stormy weather that slammed much of the United States last month.
The dollar rose against the euro on concerns euro zone policymakers are unlikely to provide a rescue package for Greece at a summit of European Union leaders later this week.
Disenchantment with the European single currency was compounded by its decline to an all-time low against the Swiss franc.
MSCI's all-country equity index rose 0.6 percent, while European shares hit a more than 17-month closing high. Asian stocks earlier in the day also had gained.
The S&P industrials sector along with the the S&P materials sector helped lead the advance.
"Industrials have been among the best performers so far this year, so they're getting a lot of the momentum money," said John Massey, portfolio manager at SunAmerica Asset Management in Jersey City, New Jersey. "I think it's clear we're in an upward path." The Dow Jones industrial average closed up 102.94 points, or 0.95 percent, at 10,888.83. The Standard & Poor's 500 Index was up 8.36 points, or 0.72 percent, at 1,174.17. The Nasdaq Composite Index was up 19.84 points, or 0.83 percent, at 2,415.24.
"Our view is that housing is bottoming and beginning a slow improvement, but we're going to bounce along the bottom for a while," said Henry Smith, chief investment officer at Haverford Trust Co. in Philadelphia.
Sales of previously owned US homes fell for a third straight month, the association said, while the supply of unsold houses on the market surged, suggesting housing is still struggling to find its feet.
Oil prices rose slightly to near $82 a barrel as rising stock prices offset a stronger dollar, which kept oil from rising further.
US crude for May delivery, a contract that began trading on Tuesday, rose 31 cents a barrel to settle at $81.91. London Brent crude for May settled up 16 cents at $80.70 a barrel.
Gold prices rose after two sessions of declines that stemmed from worries about a surprise interest rate hike on Friday in major bullion consumer India.
US April gold futures settled up $4.20 at $1,103.70 an ounce in New York.
US Treasury debt prices eased following disappointing results of a two-year note auction and as higher stock prices undermined the safe-haven allure of lower-risk government debt.
US benchmark 10-year Treasury notes shed 8/32 in price to yield 3.69 percent, while two-year notes slipped 1/32 to yield 0.98 percent.
