Despite the predictions that a downward adjustment was overdue, U.S. markets posted strong gains on Tuesday, with the Dow up for the 10th time in 11 sessions.

The DJIA added 102.94 points, or 0.95 percent, to 10,888.83, by the close of day. The Standard & Poor's 500 added 8.36 or 0.72 percent to 1,174.17. The Nasdaq composite index gained 19.84 or 0.83 percent to 2,415.24.

On the New York Stock Exchange, 2,195 shares advanced and 815 declined on a volume of 4.4 billion shares traded.

While Bank of America gained 1 percent, in the run-up that pushed the DJIA to a 17-month high, Citigroup shares rose 2.23 percent. Sprint Nextel shares rose 3.37 percent.

The 10-year Treasury note fell 7/32 to yield 3.687 percent.

There was a fall in the euro which fell to $1.3504 from Monday's $1.3552. Against the yen, the dollar rose to 90.424 yen from Monday's 90.16 yen.

In London, the FTSE 100 index rose 0.52 percent, 29.09, to 5,673.63. (With Inputs from Agencies)