Santa Visits Wall Street

Stocks also celebrated the results of the second of four planned Federal Reserve loan auctions. The Fed said it has accepted $20 billion in propositions from U.S. banks, which will borrow money for 35 days at 4.67%, below the current discount rate banks would normally borrow at. Overall, 73 banks bid $57.7 billion in the auction.

The Fed added that it intends to conduct the biweekly auctions as long as needed in order to address the pressures in short-term funding markets.

"This is a definite plus, and it will hopefully break the logjam in the credit arena," said Robert Pavlik, chief investment officer with Oaktree Asset Management. "This is a different environment than we've had in the past, so we're hoping to see a freeing up of these credit concerns."

Research In Motion's blockbuster report after the prior close also provided a boost. The BlackBerry maker posted third-quarter earnings and revenue that more than doubled from a year ago.

RIM also said that income should top projections for the fourth quarter. Shares added $11.64, or 10.9%, to $118.63.

The RIM report came on the heels of strong earnings from software maker Oracle, which helped spur a tech rally last time out. In the prior session, the Nasdaq surged 39.85 points, or 1.5%, to 2640.86. The Dow rose 38.37 points, or 0.3%, to 13,245.64, while the S&P 500 added 7.12 points, or 0.5%, to 1460.12.

"This is a tech-led rally thanks to RIM and Oracle," said Pavlik. "There's a positive feeling among tech stocks. There's been cash building up on the sidelines, so there's some rotation into these tech names."