US stocks : Dow up 0.9 pct
Banks, energy and technology - sectors that would benefit during economic expansion - led gains as investors remain confident that lawmakers will come to an agreement to avoid the so-called "fiscal cliff" deadline at the end of the year.
The PHLX oil services sector index jumped 3.1 percent, with eight of its 15 components up 3 percent or more.
"The view is that the economy is getting better, and that is always good for energy demand," said Shawn Hackett, president at Hackett Financial Advisors in Boynton Beach, Florida.
Hackett said the United States would avoid "whatever the cliff means" for the economy, allowing investors to focus on growth.
President Barack Obama's most recent offer to Republicans in the ongoing budget talks makes concessions on taxes and social programs spending. House Speaker John Boehner said the offer is "not there yet," though he remains hopeful about an agreement.
Senate Democrats, however, have expressed concern about cuts to Social Security.
Financial stocks shot higher, as traders bet on a greater demand for loans and a steepening of the yield curve. U.S. government debt sold off Tuesday, with the benchmark 10-year U.S. Treasury note's yield briefly hitting its highest since late October.
The S&P financial sector added 1.5 percent.
The Dow Jones industrial average rose 115.57 points,
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