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The markets are whizzing back into the green after taking their worst slide of the year in the last session as traders cheer a round of upbeat data on the global economy.
As of 2:30 p.m. ET, the Dow Jones Industrial Average climbed 120 points, or 0.87%, to 14000, the S&P 500 gained 17.5 points, or 1.2%, to 1514 and the Nasdaq Composite advanced 43.1 points, or 1.4%, to 3174.
European political fears shook the markets Monday, sending the broad S&P sliding 1.2% in its steepest drop since November. However, a round of better-than-expected data lifted sentiment Tuesday.
Every S&P 500 sector was recently in the green, led by consumer staple and health-care names. Meanwhile, the yield on the benchmark 10-year Treasury bond climbed to 2.012% from 1.958% as traders ditched the safe-haven asset.
Upbeat Global PMI Reports
A report from the Institute from Supply Management showed the U.S. services sector expanding at a slightly slower pace in January than the month before. The ISM services PMI gauge fell to 55.2 in January from 55.7 in December, matching expectations.
"The service sector of the U.S. economy is the dominant provider of jobs and so strength in this index suggest ongoing expansion in the U.S. economy," Dan Greenhaus, chief global strategist at BTIG wrote in an email.
A final reading of Markit's eurozone composite PMI gauge checked in at 48.6 in January from a previous estimate of 48.2 and 47.2 in December. It suggests the 17-member currency bloc's economy is still shrinking, but at its slowest pace in 10 months as declines were slowed in both the manufacturing and services components.
"The eurozone is showing clear signs of healing, with the downturn easing sharply in January and the region moving closer to stabilisation in the first quarter," Markit Chief Economist Chris Williamson said in the report.
Still, the recovery hasn't been spread evenly. Germany's economy, Europe's biggest, is growing, while France, Italy and Spain are still pulling back.
A separate PMI report from HSBC showed output across China's manufacturing and services sectors heated up at the swiftest pace in two years. The data have helped to ease fears that the economy could be in for a so-called "hard landing" in which the rate of growth plunges.
In corporate news, Dell (NASDAQ:DELL) is being taken private for $13.65 a share by founder Michael Dell and Silver Lake in a deal valued at $24.4 billion. In what could be a good sign for the private equity industry, it was the biggest leveraged buyout since the financial crisis that stifled capital markets.
Analysts also noted attention could shift back to Capitol Hill. The Congressional Budget Office projects the U.S. budget deficit will come in around $845 billion, or 5.3% of gross domestic product, for fiscal 2013. The CBO also said it expects the unemployment rate to remain in the area of 8% this year, with the U.S. economy growing 1.4%.
President Barack Obama also called on lawmakers to temporarily delay sequestration -- a painful punch of spending cuts -- while they work on a longer-term budget solution.
Elsewhere, oil prices pushed higher. The benchmark oil contract climbed 69 cents, or 0.72%, to $96.86 a barrel. Wholesale New York Harbor gasoline jumped 1.3% to $3.049 a gallon. In metals, gold rose $1.50, or 0.09%, to $1,678 a troy ounce.
The Euro Stoxx 50 jumped 1.1% to 2653, the English FTSE 100 rose 0.62% to 6285 and the German DAX climbed 0.36% to 7663.
In Asia, the Japanese Nikkei 225 sold off by 1.9% to 11047 and the Chinese Hang Seng plunged 2.3% to 23149.