Also bolstering market sentiment were expectations of another interest-rate cut of a quarter of a percentage points, to 2%, by the Federal Reserve, which is slated to release its decision at 2:15 p.m. Eastern.
"The market is pricing in an 80% chance that the Fed cuts rates .25%. The dollar is likely to continue strengthening if the Fed signals an end to rate cuts after an expected reduction today. Many believe this will also cause commodity prices to fall," said James Hyland, an analyst with Wachovia Corp.
The Dow Jones Industrial Average rose 49.42 points to 12,881.36, with 18 of its 30 components trading higher, with the blue-chip advance led by General Motors , recently up 9.4% after the auto maker reported a first-quarter net loss of $3.25 billion, or $5.74 a share, compared with net income of $62 million a year earlier. Its adjusted loss of 62 cents a share, however, was well ahead of the $1.60 loss analysts were expecting.
The S&P 500 gained 3.74 points to 1,394.68 , while the Nasdaq Composite climbed 5.3 points to 2,431.4.
On the New York Mercantile Exchange, crude-oil futures climbed ahead of data on U.S. petroleum inventories, with the contract for June delivery in recent trade up 74 cents at $116.37 a barrel.
Shares of Proctor & Gamble Co. climbed 2.1% after the consumer-products giant reported earnings that topped forecasts.
Citigroup said late Tuesday it's raising $3 billion selling new common shares as its tries to rebuild capital after huge losses from the credit crunch.
Shares of the blue-chip financial giant shed 2.6%.
Ahead of the opening bell, data showed the U.S. economy grew at an annual rate of 0.6% in the first three months of the year, topping the 0.2% rate expected by economists.
Companies in the U.S. private sector added 10,000 jobs in April, according to the ADP employment report. Economists had expected ADP to drop by 55,000 in April.
Japan's Nikkei 225 Average closed 0.3% lower overnight. The Bank of Japan left its key interest rate on hold, as expected. European markets were higher ahead of the Fed's rate decision, with the German DAX 30 index up 0.6%.
U.S. stocks ended mostly lower on Tuesday, though the technology sector was lifted by upbeat earnings from Corning. While the Dow Jones Industrial Average ended down 39 points, the technology-focused Nasdaq Composite rose 1.7 points.
By Kate Gibson