NEW YORK (Reuters) – U.S. stocks rose on Tuesday, with the market poised for its best month in six years, as positive news from European financial institutions lifted bank shares and a broker upgrade for Microsoft (NasdaqGS:MSFT – News) helped lift tech shares.

Major U.S. banks’ stocks climbed on improving sentiment after Barclays (LSE:BARC.L – News) declined to take part in a British government asset-protection plan and Fortis (Brussels:FOR.BR – News) outlined its future as a viable insurance group following a 2008 loss of 28 billion euros.

After Monday’s sharp sell-off in banking shares, JPMorgan Chase (NYSE:JPM – News) rose 7.7 percent to $26.75, while Bank of America shares (NYSE:BAC – News) jumped 11.4 percent to $6.72.

“What is happening is little by little, we are starting to make progress in terms of the perceived risk,” said Mark Bronzo, portfolio manager at Security Global Advisers in New York.

“People are starting to say, ‘Maybe I shouldn’t be short on these stocks, maybe I shouldn’t be underexposed.'”

Technology shares also helped drive the market’s gains as brokerage Davenport upgraded Microsoft Corp to “buy” from “neutral,” citing increased demand for personal computers in China and the United States, and potential restocking of inventories in Europe.

Microsoft shares added 6.9 percent to $18.69 and contributed the most to the Nasdaq’s advance.

“Tech has been a very strong performer this quarter,” added Bronzo. “We have gotten some commentary that some of the technology component marketplaces are stabilizing and as a result, these names are stabilizing.”

The Dow Jones industrial average (DJI:^DJI – News) gained 154.92 points, or 2.06 percent, to 7,676.94. The Standard & Poor’s 500 Index (^SPX – News) jumped 17.56 points, or 2.23 percent, to 805.09. The Nasdaq Composite Index (Nasdaq:^IXIC – News) added 43.56 points, or 2.90 percent, to 1,545.36.

The broad S&P 500 was in line to close March as the best month since April 2003 after a rally that has driven stocks up nearly 19 percent from 12-year lows hit on March 9.

The S&P financial index (^GSPF – News) rose 7.2 percent, bouncing back from a sell-off on Monday when it was hurt by anxiety over the banking sector’s health.

Alcoa (NYSE:AA – News) shares shot up 12.4 percent to $7.51 after Deutsche Bank upgraded the aluminum company’s stock to “hold” from “sell” and raised its price target.

And on Nasdaq, shares of Autodesk (NasdaqGS:ADSK – News) shot up 12.2 percent to $17.08 after UBS upgraded the design software and services company.

On the economic front, the picture remained dark although investors appeared to pay less attention to the data, with damage limited to the homebuilding sector.

Prices of U.S. single-family homes dropped a record 19 percent in January from a year earlier, weighing on homebuilders, while March U.S. consumer confidence came in barely above the record monthly low.

The Institute for Supply Management-Chicago index of business activity fell in March at a rate that was more severe than expected.

The Dow Jones homebuilders index(DJI:^DJUSHB – News) fell 2.1percent.

(Editing by Jan Paschal)

Source: yahoo finance

Tags: dow, nasdaq, stock market, usa, Wal street

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