"You need well below that to get people worried about a double-dip (recession) and well above that to get people too worried that the Fed is going to tighten."
Stocks also advanced as investors re-allocated positions for the end of the quarter, with the S&P 500 up 5.5 per cent.
"They are selling commodities, they are moving back into industrials you've got a mini-market rotation coming into your final couple of days of the quarter, and that is the way the window dressing takes place. It's also how the pre-positioning takes place for the start of the quarter," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.
The Dow Jones industrial average gained 73.42 points, or 0.60 per cent, to 12,352.43. The Standard & Poor's 500 Index added 8.67 points, or 0.66 per cent, to 1,328.11. The Nasdaq Composite Index rose 15.24 points, or 0.55 per cent, to 2,772.12.
Investors also were eyeing the 1,330 level as a possible resistance point for stocks, with the benchmark S&P unable to hold gains above that mark in its three previous attempts.
In the latest on the M&A front, Canadian drug maker Valeant Pharmaceuticals International on Tuesday made an unsolicited bid to buy Cephalon Inc for $5.7 billion, driving Cephalon's stock up 28.1 per cent to $75.25 while Valeant's US-listed shares shot up 10.4 per cent to $49.-Reuters