A raft of merger and acquisition activity in the global drug sector helped underpin equities on both sides of the Atlantic, as did better-than-expected earnings from companies including Netflix and Travelers.
Shares of Allergan soared, last up 15.3 percent, after Canada's Valeant Pharmaceuticals offered to buy the company in a deal worth some US$46 billion. Separately, Novartis, GlaxoSmithKline, and Eli Lilly also announced deals.
"The Novartis-Glaxo deal and rumours about a potential AstraZeneca acquisition by Pfizer are giving the pharma sector a decent run," Witold Bahrke, a senior strategist at PFA Asset Management in Copenhagen, told Bloomberg News. "It's also fuelling further M&A expectations, which is helping equities today. The yo-yo market is set to continue, with ups and downs amid continued geopolitical uncertainty."
In afternoon trading in New York, the Dow Jones Industrial Average advanced 0.62 percent, the Standard & Poor's 500 Index added 0.68 percent, while the Nasdaq Composite Index climbed 1.18 percent.
Gains in shares of Home Depot and JPMorgan Chase, up 2.4 percent and 1.8 percent respectively, led the Dow higher.
Shares of Facebook rose, last up 3.1 percent, after Credit Suisse upgraded the stock to "outperform".
Solid quarterly earnings helped lift shares of companies including Netflix, Comcast, United Technologies and Travelers, respectively up 5.9 percent, 2.3 percent, 1 percent, and 0.4 percent.
To be sure, it wasn't all good news. Shares of McDonald's slipped 0.2 percent after the company posted another quarterly decline in sales.
On the housing front, a National Association of Realtors report showed that existing home sales fell 0.2 percent to an annual rate of 4.59 million units, the lowest level since July 2012. It was still better than economists had anticipated and provided reason for optimism that the housing market is stabilising.
"The negative housing momentum, which was exacerbated by severe weather conditions during the winter months, may be starting to fade," Gennadiy Goldberg, an economist at TD Securities in New York, told Reuters.
Meanwhile, demand for a US Treasury auction of US$32 billion of two-year notes drew lacklustre demand in a sign that the Federal Reserve has not managed to alleviate concerns it might lift borrowing costs sooner than anticipated.
"A weak auction shows the market has lost some confidence in the Fed's ability to clearly articulate its message," Thomas Simons, a government-debt economist in New York at Jefferies, one of the primary dealers that are required to bid at the auctions, told Bloomberg News before the sale. "When the Fed will ultimately raise rates remains a big question."
In Europe, the Stoxx 600 Index ended the day with a 1.4 percent increase from the previous close. The UK's FTSE 100 gained 0.9 percent, while France's CAC 40 rose 1.2 percent, and Germany's DAX rallied 2 percent.