Investors gained confidence from a recovery in the bond market that sent interest rate yields on Treasury securities lower.
The Dow index ended the day up 31.03 points at 5,581.86.
Advancing issues outnumbered decliners by about 4 to 3 on the New York Stock Exchange, where volume totaled 379.20 million shares, up from 366.10 million in the previous session.
In broader markets, results were mostly higher. The NYSE index gained 1.24 to 351.57. The S&P 500 rose 2.21 to 654.75, while the Nasdaq index advanced 4.15 to 1,152.98. The American Stock Exchange market value index was 2.24 points lower at 566.67.
Tuesday's gains marked a second attempt at a rebound from Friday's nerve-wracking 115-point Dow loss, which was spurred by strong employment statistics that spread the fear of inflation through the financial markets.
Higher inflation increases the chances the Federal Reserve will soon raise interest rates to curb an economy that is perceived to be growing too fast.
Reacting to the fears of higher rates, bond market yields jumped Friday and that caused a deep slide in stocks.
In Tuesday's trading, the benchmark 30-year Treasury bond rebounded slightly. It gained one-half point pushing its yield down to 7.13 percent from 7.8 percent late Monday.