An upbeat economic assessment by US Federal Reserve Chairman Alan Greenspan prompted investors to bid stocks higher on Wall Street.
Mr Greenspan's comments about the economy helped the market shake off earlier losses, which had followed news of a federal investigation into IBM's bookkeeping.
The Dow Jones industrial average closed up 25.14, or 0.3%, at 8,922.95. On Monday, the Dow gained 47.55 to reach its highest closing level since November 27, when it stood at 8,931.68.
The market's broader gauges also higher. The Nasdaq composite index rose 12.81, or 0.8%, to 1,603.56. The Standard & Poor's 500 index advanced 4.56, or 0.5%, to 971.56.
The gains were surprising given IBM's bad news and the fact that analysts said the market was due for some profit taking following weeks of rallies. All three of the major gauges have climbed higher in four of the past five weeks due to companies reporting better-than-expected first-quarter profits and economic news turning more positive.
Among today's winners on Wall Street, Brocade Communications rose 1.22 to 7.26 after Merrill Lynch upgraded the networker to "buy" from "neutral".
Intel advanced 72 cents to 21.10 ahead of the mid-quarter update the chipmaker is expected to deliver on Thursday.
School Specialty climbed 3.76 to 25.45 after the school supplies company reported a fourth-quarter loss that was a penny a share lower than Wall Street anticipated.
IBM was easily the Dow's biggest loser, dropping 3.51 to 83.82 after announcing on Monday that the Securities and Exchange Commission is investigating how the company booked revenue in 2000 and 2001.
The Russell 2000 index, the barometer of smaller company stocks, rose 1.24, or 0.3%, to 443.87.