About 90 minutes into trade, the Dow Jones Industrial Average gained 120.52 points (0.72 percent) to 16,947.12.
The broad-based S&P 500 rose 11.64 (0.59 percent) to 1,971.87, while the tech-rich Nasdaq Composite Index jumped 46.88 (1.06 percent) to 4,455.06.
Automakers General Motors, Ford Motor and Chrysler all bested expectations for June US sales.
GM, for example, reported a one percent rise in sales to 267,461, much better than the 8.5 percent decline forecast by online shopping site Edmunds.com. GM shares rose 2.0 percent.
The Commerce Department reported US construction spending in May increased a less than expected 0.1 percent.
The closely watched Institute for Supply Management purchasing managers index of US manufacturing activity inched 0.1 point higher in June to 55.3, under the 0.4 point rise projected. Still, a reading above 50 indicates growth.
Other data showed Chinese manufacturing activity grew in June, while eurozone unemployment dipped in May.
Microblogging site Twitter jumped 4.1 percent on reports it appointed former Goldman Sachs banker Anthony Noto as chief financial officer.
Video-streaming company Netflix jumped 5.8 percent on an upgrade from Goldman Sachs.
Computer giant Hewlett-Packard announced it reached a settlement in a shareholder lawsuit over its 2011 acquisition of British software firm Autonomy, which was overvalued due to accounting irregularities. Terms were not disclosed. HP rose 1.8 percent.
Dow component General Electric announced it acquired for an undisclosed sum British company Monsal, which works to reduce energy use in wastewater treatment. GE shares rose 0.4 percent.
Bond prices fell. The yield on the 10-year US Treasury increased to 2.55 percent from 2.52 percent Monday, while the 30-year advanced to 3.38 percent from 3.34 percent. Bond prices and yields move inversely.