Bets on euro zone progress boost shares

US stocks gained on Tuesday as investors bought shares beaten down in recent weeks and bet European leaders would take action soon to ease the Greek debt crisis.

The Dow Jones industrial average was up 44.73 points, or 0.40 percent, at 11,105.85. The Standard & Poor's 500 Index was up 10.60 points, or 0.91 percent, at 1,172.87. The Nasdaq Composite Index was up 37.06 points, or 1.49 percent, at 2,532.15.

European stocks ended higher, staging a rally from two-year lows hit in morning trade led by recovering banks, but a sharp rise in Italy's borrowing costs and simmering fears of a Greek debt default kept gains in check.

The FTSEurofirst 300 index of top European shares ended 1.1 percent higher at 900.43 points, after sinking as low as 878.09 in morning trade, a level not seen since mid-2009.

The Nikkei stock average rose 1 percent as short-covering emerged after a tumble the day before, but traders said gains may be short-lived as investors focus on Europe's persistent debt woes and the US economic outlook.