Stocks were at session highs, with the Nasdaq approaching a 1 percent gain, as banks rebounded and the market reacted positively to another robust Treasury auction.
The major indexes had been trading in a narrow range for most of the day but broke out as the final two hours of trading began.
Dow componentProcter & Gamble
rose after the consumer products makerupdated its annual and first-quarter outlook
and forecast a return to organic sales growth in the second quarter.
U.S. health insurers such as Cigna and Aetna climbed as analysts said President Obama's highly anticipated speechurging Congress to act on health reform revealed no "game changers." Analysts also deemed the possibility of a public plan that would seriously undermine the companies as unlikely following the speech.
"Obama's address marks the home stretch in healthcare reform; we expect a watered-down resolution this year," Leerink Swan analyst John L. Sullivan wrote in a research note. "We expect a lowest-common-denominator bill (some health insurance curbs, subsidies for some of the uninsured, no public plan) on Obama's desk in 2009. For healthcare investors, we believe a benign end to this overhang is in sight."
The sector itself was slightly higher, with the SPDR Healthcare Select ETF edging up and improving with the broader market.
Elsewhere, Monsanto slipped after the world's biggest seed maker said its forecast for fiscal 2010 earnings were below estimates and announced plans to make deeper work force cutsthan previously announced, saying it will reduce its staff by about 8 percent to cut costs.
Initial claims for unemployment insurancefell more than expectedto a seasonally adjusted 550,000 from an upwardly revised 576,000 in the previous week. Analysts expected claims to drop to 560,000, according to Thomson Reuters.
The initial reaction to the 30-year bond auction was muted but picked up as trading continued.
Analysts have been bedeviled by the rise in stocks and drop in bond yields despite September's reputation as the worst for the market, and the political and economic headwinds confronting the markets.
"The market tried to fool the majroity of the people the majority of the time," Mike Holland, of Holland and Co., said on CNBC. "What's going on now is something that's very reminiscent of the 1970s markets when the backdrop politically and economically was really ugly and thes tocks actually did very well."
- Watch Live: President Obama on Insurance Reform
Weakness in the financial sector had been limiting gains, but the market rallied as the SPDR Financial Select ETF, which tracks the movements of larger companies in the group, turned positive.
Walt Disney , Time Warner and CBS were among major media companies that surged after Goldman Sachs raised the U.S. entertainment sector to "attractive" from "neutral," citing a stronger-than-expected rebound in national advertising.
Additionally, UAL and U.S. Airways jumped after JPMorgan upgraded both airline companies to "overweight" from "neutral" and wrote that fundamentals for the sector were on the mend.