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New York - US stocks rose more than 1% on Tuesday helped by hopes that China will launch a stimulus programme and signs Greece's elections might push through a euro-friendly government.
But Facebook shares headed in the opposite direction again, dropping nearly 10% to $28.84, far below the $38 IPO price of May 18.
At the close of trade the Dow was up 125.86 points to 12,580.69.
The S&P 500 index gained 14.60 to 1,332.42, while the Nasdaq added 33.46 to 2,870.99.
"Sentiment was strengthened... amid speculation of further stimulus in the form of increased spending by China, and encouraging comments from political leaders in Greece pertaining to their interest in maintaining their country's membership in the euro," said Briefing.com.
Bank of America led the Dow blue chips higher with a 4.1% gain, followed by China-sensitive Caterpillar, up 2.9%, and Alcoa, 3.0%.
Chesapeake Energy jumped 3.4% on the news late Friday that corporate raider Carl Icahn had built a 7.6% stake in the company and signaled he would try to shake up the natural gas giant's board.
On the Nasdaq, both Apple and Microsoft gained 1.7%, while the newest big tech counter, Facebook, sank again, bringing its loss on the IPO price to 24%.
So far eight class-action lawsuits have been lodged against the company in district courts in New York and California alleging that smaller investors were denied information that would have darkened their views of the company in the days before the listing.
In afterhours trade shares in Blackberry maker Research In Motion sank nearly 11% from its closing price of $11.23 after it warned that it could report a loss in the current quarter.
The company also said it had hired JP Morgan Securities and RBC Capital Markets to study its strategic options.
Bond prices edged higher with the dollar's gains against the euro. The yield on the 10-year Treasury bond fell to 1.73% from 1.75% late on Friday, while the 30-year fell held at 2.84% from 2.85%.
Bond prices and yields move in opposite directions.
