The Dow Jones industrial average gained 93.13 points to close at 6,945.85, moving back within striking distance of 7,000.
Advancers outnumbered decliners by more than a 5-to-3 margin on the New York Stock Exchange, with 1,604 up, 947 down and 785 unchanged. NYSE volume totaled 528.90 million shares vs. 536.28 million yesterday.
The Standard & Poor's 500-stock list rose 11.04, or 1.4 percent, to 801.99. The NYSE's composite index rose 4.99 to 420.67. The Nasdaq composite index rose 11.73 to 1,329.10, and the American Stock Exchange index rose 3.84 to 600.88.
Bonds rose today as the yield on the 30-year Treasury -- a key determinant of corporate and consumer borrowing costs -- sank from late yesterday's 6.86 percent, the highest finish since late January, as low as 6.82 percent.
With no major economic reports, investors spent much of the session awaiting this afternoon's appearance at the House Banking Committee by Fed chairman Greenspan.
In a Senate appearance last week, Greenspan sent the markets tumbling by threatening to raise the central bank's interest rates to contain inflationary pressures.
Although he reiterated his views today, Greenspan was seen as less strident in tone, suggesting that stock valuations may be justified if earnings forecasts prove accurate.
He also insisted today that he isn't trying to manhandle the markets.
"We have a very complex international market system with millions of players in the game," Greenspan said. "There is no way you can talk down or talk up prices or interest rates."
The Fed last changed its key lending rates on Jan. 31, 1996 in an effort to ensure that the economy did not slip into a recession. Now that economic growth has revived, many economists expect the central bank to start raising rates in a pre-emptive strike against inflation, perhaps at a scheduled policy meeting on March 25.