Stocks rallied to finish higher in another volatile session Tuesday, led by industrials and materials, but investors continued to remain cautious over the euro zone debt crisis and the economy.
The Dow Jones Industrial Average rose 44.73 points, or 0.40 percent, to finish at 11,105.85, after toggling between positive and negative territory throughout the session. The Dow still remains on pace for its biggest quarterly point loss since the fourth quarter of 2008.
Intel and GE gained on the blue-chip index, while BofA slipped.
The S&P 500 gained 10.60 points, or 0.91 percent, to end at 1,172.87. The Nasdaq jumped 37.06 points, or 1.49 percent, to close at 2,532.15.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, traded below 38.
All 10 S&P sectors finished higher, led by industrials and materials.
The BRICS major emerging markets are in "preliminary stage" talks about increasing their holdings of euro-denominated bondsin an effort to help ease the euro zone debt crisis, according to a Reuters report, citing Brazilian government officials.
European shares finished higher, led by banks, following news that Greek Prime Minister George Papandreou is scheduled to hold a conference call with German Chancellor Angela Merkel and French President Nicolas Sarkozy on Wednesday to focus on developments on Greece's economy.
On Monday, investors were encouraged after an FT report that said Italy’s government is looking to China to see if they will make "significant" purchases of the debt-ridden nation's bonds and investments in strategic companies.
However, an Italian government source said the recent meetings with China discussed possible Chinese investments in Italian industrial assets, not bonds as previously expected, according to a report from Reuters.
Meanwhile, an auction of Italian 5-year debt saw yields rise, demonstrating there is still concern about Italian sovereign debt. The Italian government meets later this week to finalize new budget measures to bring the deficit down, but debt at 120 percent to GDP remains a major concern for the country.