Stocks rallied more than 1 percent across the board Tuesday, wiping out most of the previous day's declines, but investors remained cautious amid the ongoing uncertainty in the euro zone.

Shortly after the closing bell, Dell announced it will initiate a $0.08 quarterly dividend beginning in the third quarter. Shares rallied in extended-hours trading.

The Dow Jones Industrial Average rallied 162.57 points, or 1.31 percent, to finish at 12,573.80, led by Boeing after Bernstein boosted its rating on the company to "outperform" and raised its price target to $92 from $85. JPMorgan and BofA also jumped.

United Tech was the only laggard on the blue-chip index.

The S&P 500 rose 15.25 points, or 1.17 percent, to end at 1,324.18. The Nasdaq jumped 33.34 points, or 1.19 percent, to close at 2,843.07.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, slipped near 22.

All key S&P sectors ended in positive territory, led by financials and materials.