The Dow Jones industrial average rose 43.65 to 5,733.47, pulling back above 5,700 for its best close since before July's sharp sell-off and moving within 55 points of a record close.
Advancing issues outnumbered decliners by a 12-to-7 margin on the New York Stock Exchange, with 1,506 up, 874 down and 810 unchanged.
NYSE volume totaled 354.49 million shares vs. 348.74 million in the previous session.
Broad markets also rose. They were led by the Nasdaq market, where computer-related shares added to yesterday's surge.
The NYSE composite rose 2.61 to 358.72, and the S&P 500-stock index advanced 5.60 to 670.67.
The Nasdaq composite jumped 17.07 to 1,143.91, and the American Stock Exchange's market value index rose 2.64 to 560.32.
Analysts attributed much of the market's strength to news the German central bank lowered a key interest rate, a surprisingly large cut aimed at stimulating Europe's biggest economy. The Bundesbank's action prompted central banks in Belgium and France to lower their lending rates as well.
U.S. stocks were higher despite another weak day in the bond market, where Treasuries continued to surrender some of the gains that have helped spur the stock market with falling interest rates. The yield on the 30-year Treasury bond rose to 6.84 this afternoon, up from 6.83 percent late yesterday.