Stocks closed higher after losing ground in the last few minutes of the session following the release of the Federal Reserve's minutes indicating the central bank would step in to stimulate the economy "before long."
The Dow Jones Industrial Average rose 10.06 points, or 0.1 percent, to 11,020.40, to close above 11,000, a five-month high.
Bank of America , Alcoa, and JP Morganrose, while Verizon, Wa-Mart and Home Depot fell.
The S&P 500 rose 4.45 points, or 0.4 percent, to 1,169.77, while the tech-heavy Nasdaq rose 15.59 points, or 0.7 percent, to 2,417.92. Both indexes reached their highest levels since May 12.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell below 19.
Most of the key S&P 500 sectors rose, led by financials, technology and materials.
The minutes from the Federal Reserve's September meetingindicated most members of the central bank expect the economy to remain weak through 2012 and believe buying assets to stimulate the economy is warranted.
Market watchers had been waiting for the minutes of the Federal Reserve's September meeting for any indication of whether the Fed would begin another round of asset buying. The news out of the meeting was largely as expected. Still unknown is the extent of the Fed asset buying, and when it willoccur. Many, however, expect the Fed to buy about $500 billion in assetsat the Fed's next meeting on Nov. 2-3.
Google shares rose after the search engine giant said it is using its vast database of web shopping data to construct the ‘Google Price Index’—a daily measure of inflation that could one day provide an alternative to official statistics.
In addition, Google is scheduled to report earnings on Thursday. Analysts polled by Thomson Reuters expect the firm to earn $6.69 a share, excluding expenses for employee stock compensation, on revenue of $5.27 billion, after subtracting Google's ad commissions.
Intel shares were higher ahead of the tech giant's earnings, expected after the bell tonight. Analysts expect Intel to earn 50 cents a share on revenue of $10.99 billion.
Shares of rivals SanDisk and Micron were trading higher even after the president of Samsung's chip business warned theglobal memory chip market is likely to be weak through the first half of 2011.
Apple advanced following an announcement that Wal-Mart will start selling the iPad tabletstarting this Friday. In addition, Barclays raised its price target on Apple to $385 from $340.
Wal-Mart rivals Best Buy and Target are already selling the iPad.
IAC/Interactive shares slipped more than 2 percent after Cowen cut its rating on the Internet company to "neutral" from "outperform."
Shares of RightNow Technologies jumped more than 13 percent after the software maker raised its view for third-quarter earnings, saying buisness continues to grow. Shares of rival BMC Software and Salesforce.com also rose.
Verizon shares tumbled more than 2 percent after the telecom giant was downgraded by Sanford Bernstein to "underperform" from "market perform," citing a "stretched valuation" and risk to the company's future dividend coverage. Rival AT&T was flat despite Bernstein's conclusion the wireless firm would have no trouble covering its dividend.
Deep water drilling stocks including Transocean , Noble and Diamond Offshore climbed following news that the Obama administration will lift the six-month deep water drilling moratoriumin the Gulf of Mexico imposed after the BP oil spill.
Ascent Solar Technologies jumped almost 20 percent after the thin-film solar company signed a distribution agreement with a company in the Czech Republic.
However, other energy stocks remained lower including Cabot Oil & Gas and Peabody Energy , as oil slid below $82 a barrel.