Stocks extended their rally on Tuesday, sparked by Eurozone officials' efforts to solidify the region's rescue fund in an attempt to alleviate the debt crisis.

Major indexes rose for a third straight session, with the S&P 500 up more than 5 percent over the period, its largest three-day percentage gain since mid-August.

European officials considered various approaches to maximize the bailout fund and to recapitalize banks.

Nothing has drastically changed. We get conversations around how we can get out of this mess -- and those are good. We need those, said Michael Sansoterra, portfolio manager of the RidgeWorth Large Cap Growth Fund in Atlanta, Georgia.

But we've yet to see any concrete action. Actions speak louder than words, so we'll flail about until we get some action.

Stocks also got a boost as investors rebalanced their portfolios in the last days of the quarter. The wide gap in performance between equities and bonds, favoring government debt so far this quarter, may partly reverse.

Market volatility could remain as traders react to headlines and attempt to gauge the commitment of governments and institutions as they work to prevent a Greek default.

The Dow Jones industrial average gained 257.70 points, or 2.33 percent, to 11,301.56. The Standard & Poor's 500 Index climbed 26.38 points, or 2.27 percent, to 1,189.33. The Nasdaq Composite Index advanced 53.49 points, or 2.13 percent, to 2,570.18.

The S&P materials sector was up 3.2 percent and energy stocks added 2.9 percent as commodity prices rallied on hopes Europe would avoid a recession. Mining and energy shares were the top performers among large-cap stocks.

Copper prices jumped more than 5 percent, helped by a drop in the dollar index, while U.S. crude futures jumped 4.3 percent.

Apple Inc, which is expected to unveil its new iPhone next week, edged up 0.6 percent to $405.52.

In the latest economic data, U.S. consumer confidence was little changed in September and a gauge of labor market conditions deteriorated to its worst since 1983.

The S&P/Case-Shiller survey found U.S. single-family home prices were unchanged in July on a seasonally adjusted basis but the housing market showed little sign of stabilizing.

(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)