U.S. stocks rallied on Tuesday, with major indexes settling above milestones, as investors were heartened by the signs that the economy was picking up momentum.

The Dow Jones industrial average rose for the fifth straight day, jumping 217.97 points, or 1.68 percent, to end at 13,177.68.

The Standard & Poor's 500 rallied 24.87 points, or 1.81 percent, to 1,395.96, its highest .

The Nasdaq Composite Index surged 56.22 points, or 1.88 percent, to 3,039.88. It was the first time for the index to settle above 3, 000 in more than a decade after flirting with the level last month.

Tuesday's rally came after the Commerce Department said retail sales rose 1.1 percent in February, the largest gain in five months.

This was also the second consecutive month of increasing retail sales. In January, the figure rose 0.6 percent.

Meanwhile, the National Federation of Independent Business's index of small-business optimism rose for the sixth consecutive month to the highest level since December 2007, another evidence that the economic recovery is picking up steam.

Stocks hold gains in afternoon trading after the Federal Reserve reassured investors to maintain its super-low interest rate through the end of 2014 but gave few clues about the future policy change.

In its statement, the central bank said it expects "moderate" growth over coming quarters with the unemployment rate declining gradually, which was a slight upgrade compared with its previous outlook.

Major indexes got a strong boost in the final hour after JPMorgan Chase said the Federal Reserve have completed stress tests of its balance sheet and approved a dividend increase and stock buybacks.

Just after the bank's announcement, the Fed announced summary results of the latest round of bank stress tests, showing 15 of 19 largest U.S. banks passed the tests.

Helping the gains, news from Europe was also comforting. European finance ministers finally approved Greece's second bailout deal, pulling the debt-trapped country away from an imminent bankruptcy.

As a result, the Fitch ratings agency upgraded Greece out of " restricted default" after Athens carried out the biggest debt writedown in history in a bond swap with private creditors.

Also encouraging, German analyst and investor sentiment jumped in March to its highest level since June 2010, according to the Mannheim-based ZEW economic think tank's monthly survey.

In other markets, the U.S. dollar traded mixed against major currencies in late New York trading on Tuesday as the Federal Reserve kept monetary policy unchanged.

Light, sweet crude for April delivery edged up 37 cents, or 0. 35 percent to settle at 106.71 dollars a barrel on the New York Mercantile Exchange.