The Dow Jones Industrial Average climbed 79.51 points (0.67 percent) to 11,970.53 at 1500 GMT, and the broader S&P 500 pushed up 12.64 (0.98 percent) to 1,298.76.

The tech-heavy Nasdaq rose 27.98 (1.04 percent) at 2,728.06.

"Wall Street's economic optimism (is) underpinned by solid corporate earnings," said Joseph Hargett of Schaeffer's Investment Research.

"Buying has been broad-based to this point, but materials stocks have displayed the most strength, so far," said analysts at Briefing.com.

The buying was also aided by rises in most of the main markets in Asia and Europe on Tuesday.

Pfizer's stock was up 2.5 percent on its report that fourth-quarter profit hit $2.9 billion, above analysts estimates.

But the world's biggest drugmaker warned that 2011 could be a tough year.

Package-delivery company UPS said fourth-quarter earnings increased 48 percent on an 8.4 percent hike in total revenue. UPS shares jumped 3.8 percent.

The bond market fell back in early trade. The 10-year Treasury yield moved to 3.44 percent from 3.39 percent late Monday, while the 30-year rate rose to 4.62 percent from 4.57 percent.

Bond market prices and yields move in opposite directions.