NEW YORK (

TheStreet

) -- Stocks on Tuesday recaptured all of the day before's losses, and the Dow moved above 10,000 again after reports that a rescue plan is in the works for debt-wracked Greece.

The

Dow Jones Industrial Average

added 150 points, or 1.5%, to 10,059. The

S&P 500

gained 14 points, or 1.3%, to 1071, and the

Nasdaq

improved by 25 points, or 1.2%, to 2151.

European Central Bank President

Jean-Claude Trichet

left a meeting in Australia early to return to Europe. Some speculated Trichet's change in plans was a signal he was close to addressing Greece's severe debt problems. He will attend a special EU summit in Brussels on Thursday.

>>Five Growth Stocks With a Margin of Safety

Stocks moved sharply higher in the afternoon as a slew of news reports hinted at a bailout plan. A late headline from

The Wall Street Journal

said Germany is contemplating loan guarantees in concert with the European Union to aid Greece and other bedraggled countries, though no ultimate decision has been made as of yet.

"The market got pretty oversold and sentiment got very negative, very quickly," said Max Bublitz, chief strategist at SCM Advisors.

"Now there's some blather about Greece restructuring and containing the European contagion, so markets are responding to that in addition to the fact that technically, we were just really oversold. We've gone through a few of these mini flights to safety, which I think is really the result of debt deflation working its way through the system."

Marc Pado, U.S. market strategist at Cantor Fitzgerald, called this a "classic technical bounce" and doesn't expect today's rally to sustain itself.

"The Greece issue was a catalyst for this correction that was bound to happen anyway. We were due for a pullback," Pado said, adding that he wouldn't be surprised if markets test the full 10% correction level. "By the end of February or early March, we will probably have a better chance for an extended, sustained rally."

Caterpillar

was the Dow's best performer as shares rose on an upgrade to overweight from underweight at Morgan Stanley. The stock finished 5.4% higher to $53.53.

Other Dow top performers included

Coca-Cola

(KO) - Get Report

,

Boeing

(BA) - Get Report

,

DuPont

(DD) - Get Report

,

Kraft Foods

(KFT)

and

American Express

(AXP) - Get Report

.

Materials and energy stocks helped buoy the sharp gains on the broader averages. In addition to

Alcoa

(AA) - Get Report

, other metal companies like

Freeport-McMoRan Copper & Gold

(FCX) - Get Report

,

Rio Tinto

(RTP) - Get Report

and

Southern Copper

(PCU)

were seeing big upside moves. Shares gained 3.4%, 6.8% and 3.2%, respectively.

ArcelorMittal

(MT) - Get Report

gained 5% and

Gerdau Ameristeel

(GNA)

rose 5.7%.

Several shares across the oil sector finished up by more than 2%, including

BP

(BP) - Get Report

,

Royal Dutch Shell

(RDS.A)

TheStreet Recommends

,

ConocoPhillips

(COP) - Get Report

and

Marathon Oil

(MRO) - Get Report

.

National Bank of Greece

(NBG)

was the

New York Stock Exchange's

biggest gainer, with shares up 24.6% to $4.26.

Citigroup

(C) - Get Report

,

Bank of America

(BAC) - Get Report

and

General Electric

(GE) - Get Report

were seeing the heaviest volume on the NYSE, which had a listed volume of 5.1 billion.

Coca-Cola

(KO) - Get Report

shares rose after meeting analysts' fourth-quarter profit expectations and surpassing sales estimates, helped by robust

international unit case volume.

UBS

(UBS) - Get Report

swung to a fourth-quarter profit and topped analysts' estimates. UBS, however, shed 3 cents, or 0.2%, to $12.81.

Shares of

Warner Music

(WMG) - Get Report

gained 4.8% following news of its narrower-than-expected loss.

Pulte Homes'

(PHM) - Get Report

fourth-quarter loss of 31 cents a share narrowed from the prior year, and the company said it expects cost savings by the end of 2010. Analysts, meanwhile, had been expecting a loss of 19 cents a share. The stock lost 0.5%, to $11.08.

McDonald's

reported a 2.6% surge in global same-store sales in January. Domestic sales, however, fell 0.7%. Shares added 65 cents, or 1%, to $63.57.

In an earnings announcement after the closing bell, media conglomerate

Walt Disney

(DIS) - Get Report

outpaced both top and bottom-line estimates in the first quarter. Shares traded higher in extended-hours trading after gaining 1.2% during the afternoon session.

Chinese Internet search leader

Baidu

(BIDU) - Get Report

said fourth-quarter revenue surged 40% since last year, and earnings topped forecasts, as market observers continue to speculate on what Google's exit from China may mean. Baidu climbed more than 8% in after-hours trading.

In other news, the Commerce Department said December

wholesale trade inventories slipped 0.8%, disappointing expectations for a 0.5% uptick. The November figure was upwardly revised to 1.6%, from 1.5%.

Toyota

(TM) - Get Report

said it will recall roughly 437,000 hybrid cars, including the popular Prius model. Its stock traded 2.4% higher at $74.60.

General Motors'

Opel business said it will invest 11 billion euros ($15.1 billion) over five years to breathe some life into the brand. The division also plans to cut 8,300 jobs.

Treasury prices slumped after the government sold $40 billion in three-year Treasury notes in the afternoon. The auction resulted in a high yield of 1.377%. The bid-to-cover ratio came to a slightly lower-than-usual 2.83. Indirect bidders -- a group that includes foreign central bankers -- bought just over 51%, which was also under the recent average. The benchmark 10-year Treasury note weakened 21/32, lifting the yield to 3.641%.

The sale was the first of three government note and bond auctions this week, totaling $81 billion.

Improving sentiment had investors ditching safe havens for riskier assets. The greenback fell against a basket of currencies, with the dollar index lower by 0.6%.

In commodities markets, crude oil for March delivery traded $1.86 higher to settle at $73.75 a barrel. The most actively traded April

gold contract added $11 to settle at $1,077.20 an ounce.

Late Tuesday, the American Petroleum Institute said crude stockpiles swelled by 7.2 million barrels for the week ended Feb. 5, according to

MarketWatch.

Analysts polled by Platts had anticipated a smaller build of 2 million barrels

The industry group also reported a 1.55 million barrel build in gasoline stocks and a 1.53 million barrel drawdown in distillate fuel inventories. Analysts had predicted a 1 million barrel increase in gasoline supplies and 1.75 million barrel decline in distillates.

A government inventory report from the Energy Information Administration is due out on Friday at 11:00 a.m. EST. The report, which typically comes out on Wednesday mornings, will be delayed because Federal government offices in Washington D.C. will remain closed in anticipation of inclement weather.

Overseas, Hong Kong's Hang Seng was higher by 1.2%, and Japan's Nikkei was down by 0.2%. The FTSE in London was 0.4% higher, and the DAX in Frankfurt was lower by 0.2%.

-- Written by Melinda Peer and Sung Moss in New York

.