Wall Street rose after a report showed the US economy expanded more than expected in the third quarter thanks to consumer spending, and as oil rebounded.
A Commerce Department showed US gross domestic product grew at a revised 2 per cent annualised rate in the third quarter, lower than the previously reported 2.1 per cent pace but exceeding economists' expectations for a final reading of 1.9 per cent.
GDP data "continues to tell us the same thing, that is the consumer is in reasonable shape and exports are continuing to struggle," Michael Arone, the Boston-based chief investment strategist at State Street Global Advisors' US Intermediary Business, told Bloomberg.
US Treasuries moved lower, lifting yields on the benchmark 10-year note two basis points higher to 2.21 per cent. The data underpinned the likelihood of further US Federal Reserve interest rate hikes. Last week policy makers raised their benchmark rate for the first time since 2006.
"This data is a little better for the economy than expected, so that makes it less likely that (the Fed's) tightening program is going to be derailed," David Coard, head of fixed income sales and trading at Williams Capital Group in New York, told Reuters.
In 1pm trading in New York, the Dow Jones Industrial Average climbed 0.8 per cent, while the Nasdaq Composite Index increased 0.3 per cent. In 12.45pm trading, the Standard & Poor's 500 Index gained 0.5 per cent.
Meanwhile, a report by the National Association of Realtors showed existing home sales sank 10.5 per cent to an annual rate of 4.76 million units in November, the slowest pace since April 2014. October's sales rate was revised lower to 5.32 million units.
"Sparse inventory and affordability issues continue to impede a large pool of buyers' ability to buy, which is holding back sales," Lawrence Yun, NAR chief economist, said in a statement. "However, signed contracts have remained mostly steady in recent months, and properties sold faster in November. Therefore it's highly possible the stark sales decline wasn't because of sudden, withering demand."
Indeed, Sal Guatieri, a senior economist at BMO Capital Markets in Toronto, said demand didn't cause the drop.
"Demand didn't change, the processing rules did," Gautieri told Reuters. "Look for a big-time rebound in December, as housing market fundamentals remain constructive, including falling joblessness, still-low mortgage rates, easing loan standards and plenty of pent-up demand from millennials."
Advances in shares of Caterpillar and those of Wal-Mart Stores, last up 4.6 per cent and 1.7 per cent respectively, led the Dow higher.
Energy shares including Chevron and Exxon Mobil gained, last up 1.2 per cent and 0.7 per cent respectively, as the price of oil recovered. US crude prices gained 1.1 per cent to US$36.21 a barrel, while Brent rose 0.3 per cent to US$36.44 a barrel.
To some, the outlook for oil remains bleak.
"We view the oversupply as continuing well into next year," Jeffrey Currie, head of commodities research at Goldman Sachs Group, wrote in a note on Tuesday, Bloomberg reported.
Oil prices could fall to US$20 a barrel if mild weather continues to hurt demand, Currie noted.
In Europe, the Stoxx 600 Index finished the day with a 0.1 per cent decline from the previous close, bringing its decline this month to 7.4 per cent. Germany's DAX Index also slipped 0.1 per cent. France's CAC 40 Index advanced 0.5 per cent, while the UK's FTSE 100 Index rose 0.8 per cent.