Wall Street Closes Higher

Stocks rose and extended a recent rally on Tuesday, with the Standard & Poor’s 500-stock index and Dow Jones industrial average hitting new highs as investors bet that the market’s upward momentum would continue.

By the end of trading the S.&P. had risen 1 percent, the Dow gained 0.8 percent and the Nasdaq composite was 0.7 percent higher.

Large-cap banks were among the day’s biggest advancers, with Bank of America up 2.8 percent and Citigroup up 2.4 percent. Goldman Sachs advanced 3.3 percent.

Wall Street has climbed for the last three weeks, and is up more than 14 percent so far this year, propelled by some earnings that beat lowered estimates and the Federal Reserve’s easy monetary policy designed to stimulate the economy.

“We’re riding a self-fulfilling prophecy of momentum. There’s no fundamental reason for today’s move, other than the continued easing by the Fed and momentum,” said Paul Radeke, vice president at Minneapolis-based KDV Wealth Management.

While some analysts expect the momentum to wane in the near term, as equities haven’t undergone a significant pullback this year, many say that the long-term trend remains positive as investors continue to use any market decline as a buying opportunity.

“The sheer volume of cash coming in from the sidelines is preventing any kind of correction, even though fundamentally we seem to be getting overbought,” said Mr. Radeke, who helps oversee $400 million in assets.

In company news, Nokia unveiled a new version of its Lumia smartphone line, but shares listed in the United States fell 5 percent.

Shares of Sony listed in the United States jumped 9.9 percent after Daniel S. Loeb, a billionaire hedge fund investor, called on the company to spin off its lucrative entertainment arm.

Tesla Motors, which gained 40 percent last week after lifting its sales outlook, slumped 5 percent.