Stocks gained, hitting new multi-year highs for a second straight session, as strength in energy and materials stocks outweighed pressure from financials in the wake of a disappointing earnings report from Citigroup and ahead of more reports from banks later this week.
The Dow Jones Industrial Average rose 50.55 points, or 0.43 percent, to close at 11,837.93, its highest close since June 23, 2008.
Boeing, Caterpillar and Alcoa led blue-chips higher. Verizon and Bank of America declined.
The S&P 500 gained 1.78 points, or 0.14 percent, to close at 1,295.02, its highest close since Aug. 28, 2008, while the Nasdaq gained 10.55 points, or 0.38 percent, to close at 2,765.85, its highest close since Nov. 6, 2007.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, rose to nearly 16.
Among key S&P 500 sectors, energy, industrials and materials gained, while financials and telecom fell.
Many market pros remain upbeat about the near-term prospects for the market. Expect to see a rally in the short-term, David Hefty, chief executive at Hefty Wealth Partners, said on CNBC.
“There’s only about a 20 percent probability that the market can break below 1,280 on the S&P,” Hefty said. “If we extend that forward, over the next 100 trading days, there’s about a 24 percent average return...so we’re very bullish here on the short-term.”
Apple shares closed off the lows of the day, but fell about 2 percent in the wake of the company's announcement that CEO Steve Jobs was taking a leave to focus on his health, and ahead of its earnings release after the bell.
The tech giant was expected to report a 50 percent jump in sales, according to analysts, thanks to the popularity of the iPhone and iPad during the recent holidays. Analysts polled by Thomson Reuters expect the group to have earned $5.40 per share on sales of $24.4 billion for its fiscal first quarter.
In the meantime, Apple announced that Tim Cook, the chief operating officer, will take charge of the firmin the interim. (Read More: Apple Shows Resilience Short Term)
IBM was scheduled to post earningsafter the bell Tuesday. Analysts expect the tech giant to report earnings of 4.08 per share on revenues of $28.3 billion.
Elsewhere in tech news, Intel was flat after it was downgraded to "underperform" from "market perform" by First Global, while Yahooalso declined after it was downgraded to "equal-weight" from "overweight" by Morgan Stanley.
Meanwhile, Google rose after at least four brokerages raised their price targets on the search-engine giant.
On the financial front, Citigroup shares slipped more than 5 percent after the banking giant posted a profit but missed analyst estimates. S&P Equity Research, meanwhile, maintained its "buy" rating on Citi, citing the bank's 13 percent drop in non-accrual loans from the previous quarter and an 18 percent drop in loan loss provisions.
Goldman Sachs and Wells Fargo were also in focus as both financial firms were slated to post earnings before the bell Wednesday. Goldman Sachs meanwhile said it will limit its private placement of shares of social networking site Facebookto investors outside the United States.
Comerica also sank after news the Dallas bank was buying Sterling Bancshares, a regional bank, in a stock deal worth about $1.03 billion. The move will give the Dallas bank an even bigger stake in the Texas market. Comerica was scheduled to report earnings Wednesday.
Other regional banks are also scheduled to report earnings tomorrow morning including Bank of New York Mellon, Northern Trust, State Street and USBancorp.
While most banks were in the red, JPMorgan shares rose slightly after analyst Meredith Whitney of Meredith Whitney Advisory Group upgraded the firm to a "buy," her first upgrade of a big bank since the upgrade of Goldman Sachs in 2009. Meredith has "buy" ratings on only two other stocks—Visa and MasterCard .