Stocks closed in positive territory Tuesday, with the Dow and S&P 500 both closing at record highs, boosted by gains in the health care sector.
(Read More: After-Hours Buzz: TSLA, ZNGA, VZ & More)
The Dow Jones Industrial Average gained 89.16 points to end at 14,662.01, after hitting a fresh intraday high of 14,684.49 earlier in the session. UnitedHealth and Home Depot led the gainers, while Hewlett-Packard slumped.
The S&P 500 climbed 8.08 points to finish at 1,570.25. The next milestone for the S&P 500 is its all-time intraday high of 1,576.09, set on October 11, 2007. The Dow and S&P have zigzagged between gains and losses for the ninth trading session. The Nasdaq advanced 15.69 points to close at 3,254.86.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, ended near 13.
Among key S&P sectors, health care and consumer staples rallied, while materials lagged.
(Read More: Why S&P Rally Has Another 100 Points to Go: Chartist)
"It's more of this psychology evolving about America – that it's probably where you want to leave your money," said Art Cashin, director of floor operations at UBS Financial Services. "Money's drifting in...a trickle here and a trickle there."
April has traditionally been the best month of the year for equities, which have posted an average monthly gain of 2.7 percent in the last 20 years. Also, the Dow Jones Industrial Average hasn't logged a decline in April since 2005.
(Read More: After April Showers, Market Could Bounce Back)
"The U.S. is the best place to invest right now and everyone throughout Europe and Asia, is recognizing it," said Andy Brenner, head of international fixed income at National Alliance Securities. "There's been a tremendous flight to quality in 2011 to maybe the first half of 2012, but now there's a flight from chaos in Europe and that money is coming into the U.S."
Meanwhile, Atlanta Fed president Dennis Lockhart said the central bank may be able to trim its bond-buying plan before year-end if economic growth continues to pick up and employment further improves. Lockhart said he expects the economy to grow slightly over 2 percent this year, but did warn that short-term budget cuts from Washington is a risk to near-term economic performance.
Medicare-focused insurance companies such as Humana and United Health soared after the Centers for Medicare and Medicaid Services released a final estimated payment growth rate of 3.3 percent for insurers. In February, the government proposed a payment reduction of more than 2 percent.
Nasdaq OMX plunged after the stock exchange announced a deal to acquire eSpeed for trading U.S. Treasurys in the secondary market from BCG Partners in a deal worth $1.23 billion. The move prompted Moody's Investors Service to place Nasdaq's ratings under review for possible downgrade. Meanwhile, BCG skyrocketed nearly 50 percent.
Ford climbed after the U.S. automaker posted March sales that gained 5.7 percent, topping estimates for 3.8 percent. Meanwhile, General Motors reported sales that rose 6.4 percent, missing expectations for 8.8 percent.
Among techs, Hewlett-Packard tumbled to lead the Dow laggards after Goldman Sachs has cut its rating on the tech company to "sell" from "neutral," saying sentiment about the company has moved ahead of reality.
Apple eked out a gain in choppy trading, narrowly avoiding a five-day losing streak. Earlier, Goldman Sachs removed the iPhone maker from its "conviction buy" list. Goldman said the most recent product cycle hasn't provided the boost for Apple that it had expected, but still maintained its "buy" rating on the company.
Qualcomm rose after Raymond James upgraded the semiconductor company to "strong buy" from "outperform." And Stifel Nicolaus downgraded Texas Instruments to "hold" from "buy," citing a near-term slowdown in orders for the chipmaker.
Meanwhile, Bank of America/Merrill Lynch downgraded Goldman Sachs to "neutral" from "buy" on a valuation basis.
On the economic front, factory orders climbed 3 percent thanks to the aircraft industry, according to the Commerce Department, edging past expectations. Orders excluding transportation equipment increased just 0.3 percent.
In Europe, Markit's euro zone manufacturing PMI index for March came in at 46.8, indicating an ongoing decline in the single currency zone. Still, the reading topped an earlier Reuters estimate of 46.6 and European shares ended higher as investors were relieved troubles in Cyprus appeared not to have impacted the economy significantly.
"It now looks odds-on that the euro zone suffered further GDP contraction in the first quarter of 2013, likely around 0.3 percent quarter-on-quarter, while the increased drop in orders and declining back logs of work does not bode at all well for second quarter prospects," Howard Archer, an economist at IHS Global Insight, said in a research note.
Meanwhile, Cypriot Finance Minister Michael Sarris resigned after wrapping talks with foreign lenders on a bailout that forced the island nation to impose unprecedented losses on bank depositors in return for aid.
(Read More: Why the Cyprus Crisis Isn't Over Yet: El-Erian)
—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)
Coming Up this Week:
WEDNESDAY: Mortgage applications, ADP employment report, ISM non-mfg index, oil inventories, Fed's Williams speaks; Earnings from ConAgra, Monsanto
THURSDAY: BoE announcement, Challenger job-cut report, ECB announcement, jobless claims, Fed's Evans speaks, Bernanke speaks, natural gas inventories, Fed's George speaks, chain-store sales
FRIDAY: Gov't jobs report, international trade, consumer credit
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