Dow, S&P hit record highs, Nasdaq erases 2016 losses

The Dow hit an all-time high of 18,353.76 and S&P 500 hit 2,151.96 shortly after the open

The S&P 500 and the Dow hit record intraday highs on Tuesday, while the Nasdaq wiped out its losses for the year, buoyed by increasing prospects of global economic health and with Alcoa getting the U.S. earnings season off to a promising start.

The S&P 500 hit 2,151.96 shortly after the open, breaking past the previous record of 2,143.16 on Monday. The Dow hit an all-time high of 18,353.76.

Alcoa reported a smaller-than-expected drop in quarterly profit, sending the aluminum producer's shares up 4.7% and helping boost optimism about the earnings season.

Investors appetite for equities has increased after strong economic data and low returns on government bonds, while easing political tensions in Britain and Japan have reduced some global uncertainties.

Though treasury yields are hovering at record lows, making equities more attractive, they stand to gain as central banks globally, led by Japan and Britain, chart out new stimulus measures.

"What is driving the market today is political stability in both Japan and the UK and a global drive for yield, which central banks are going to support," said John Brady, a senior vice president at R.J. O'Brien & Associates in Chicago.

At 9:48 a.m. ET (1345 GMT), the Dow Jones Industrial Average was up 115.27 points, or 0.63%, at 18,342.2.

The S&P 500 was up 13.83 points, or 0.65%, at 2,150.99.

The Nasdaq Composite was up 36.21 points, or 0.73%, at 5,024.85, and moving into positive territory for the year.

Seven of the 10 major S&P indexes were higher, led by a 1.1% rise in energy as oil prices bounced from two-months lows.

Strong corporate reports, along with low expectations for a hike in interest rates anytime soon, should keep the momentum in the market going.

While profits of S&P companies are expected to have fallen 5% in the second quarter, mirroring the first, analysts expect a return to growth throughout the second half of the year, according to Thomson Reuters data.

Seagate jumped 16.2% to $28 after the hard-disk drive maker estimated quarterly results that beat analysts' expectations.

Shares of rival Western Digital rose 3.5%.

Sage Therapeutic soared 42% to $47.69 after its postpartum drug succeeded in a study.

Advancing issues outnumbered decliners on the NYSE by 2,188 to 580. On the Nasdaq, 1,887 issues rose and 536 fell.

The S&P 500 index showed 56 new 52-week highs and one new low, while the Nasdaq recorded 115 new highs and six new lows.