Stocks advanced on Tuesday, with the Dow on track for its largest daily percentage gain since November, boosted by reports about an aid plan for heavily indebted Greece.

A senior German ruling coalition source said euro zone governments have decided in principle to help Greece and that various options were being considered.

Gains were broad-based, but shares of commodity-related companies shot higher as a decline in the dollar lifted prices of energy and gold. Shares of Chevron gained 1.9 percent to $71.45.

Everyone expects there to be some assistance out of the EU to help Greece, and that's what's giving the market a boost, said Tim Smalls, head of U.S. stock trading at brokerage firm Execution LLC in Greenwich, Connecticut.

If assistance is backed by the EU, it stops the snowball effect.

The Dow Jones industrial average <.DJI> was up 167.25 points, or 1.69 percent, at 10,075.64. The Standard & Poor's 500 Index <.SPX> was up 14.26 points, or 1.35 percent, at 1,071.00. The Nasdaq Composite Index <.IXIC> was up 25.50 points, or 1.20 percent, at 2,151.55.

Concerns over rising debt in Greece and some other euro zone countries have sapped confidence in equity markets in recent weeks, with the Dow average closing below 10,000 on Monday for the first time since November.

Industrial shares also jumped after Morgan Stanley raised its rating on the sector. Caterpillar Inc was up 5.6 percent at $53.63.

The U.S. dollar fell against the euro, while U.S. Treasuries declined. Oil futures gained $1.84 to $73.72 per barrel.

Giving a lift to the industrial sector, Morgan Stanley said industrial sector share prices should catch up to an improving business environment.

Overseas, a German newspaper, citing German coalition sources, reported that Germany is preparing an aid package for Greece and considering both bilateral help and measures agreed at the European level.

(Editing by Kenneth Barry)