Fitch rating agency said France's triple-A rating isn't expected to be downgraded. The news pushed European markets sharply higher. US markets followed.
In addition, hopes for more financial stimulus to support China's slowing economy put a charge into Asian indexes. China's Shanghai Composite surged 2.7%.
BorgWarner was the strongest performer in the S&P 500, jumping 13% after the auto-part maker's upbeat earnings guidance for 2012
In a contrast to the positive mood in the broader market, a handful of companies, mostly retailers, issued earnings warnings, sending shares lower. Among them was Tiffany, which slumped 10.5% after the high-end jewelry retailer lowered its outlook for the fiscal year.
Liz Claiborne plummeted 13% after the apparel and accessories maker said its chief financial officer is leaving the company, and lowered its earnings outlook.
WebMD Health plunged 28%. The health-information company projected lower revenue for 2012, said discussions over a possible sale of the company had been terminated and its President and Chief Executive had resigned.
Light, sweet crude closed at $102.24, lifted by concerns about Iran's nuclear program