The Dow Jones Industrial Average closed at the highest level since December 2007, lifted by a better-than-expected national manufacturing report that provided a welcome relief from a slew of disappointing regional manufacturing measures.
The Dow Jones Industrial Average climbed 65.7 points, or 0.5 percent, to 13,280. Earlier in the day, the Dow touched a high of 13,339.
Investors have been concerned that the weakness in Europe and a slowdown in China have begun to hurt the U.S. manufacturing sector, which accounts for about 12 percent of the U.S. gross domestic product.
Several regional reports have come as a disappointment for Wall Street. Notably, a gauge of the Chicago-area manufacturing activities slowed in April to the weakest growth rate in 29 months.
Tuesday's ISM report reversed the trend of the latest flow of regional manufacturing reports and bolstered investors' confidence in the world's largest economy.
U.S. manufacturing expanded at the fastest pace in 10 months in April, according to the Institute for Supply Management. New orders, production and a measure of hiring all rose, which provides a hopeful sign ahead of Friday's non-farm payroll report.
The ISM manufacturing index advanced to 54.8 percent, compared with March's print of 53.4 percent, and topped economists' estimate of a decline to 52.8 percent.