NEW YORK (CNNMoney.com) - Stocks jumped Tuesday, with the Dow 30 and S&P 500 closing at nearly 5-year highs, as sliding bond yields relieved worries about rising interest rates.

The Nasdaq composite (up 28.87 to 2,295.90, Charts) added 1.3 percent, thanks in part to a rallying chip sector.

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The broader Standard & Poor's 500 (up 13.35 to 1,297.48, Charts) index added around 1 percent, closing at its highest point since May 22, 2001. The Dow Jones industrial average (up 75.32 to 11,151.34, Charts) gained 0.7 percent, closing at its highest point since June 5, 2001.

The major gauges began the session near the unchanged line as strong earnings from Goldman Sachs competed with higher oil prices and a mild quarterly outlook from Procter & Gamble.

But the tone soon turned positive, as the higher oil prices fueled a rally in oil and other commodity stocks. Meanwhile, worries about rising interest rates eased amid a rally in bonds -- which was sparked by a report that suggested the Fed's rate hiking campaign could end soon.

"The Goldman Sachs news seemed to re-energize the bull market," said Hugh Johnson, chairman of asset management company Johnson Illington Advisors.

The stock market also got a lot of help from a rally in the bond market, he added.

Looking forward, the focus the rest of the week will be on inflation, said Peter Cardillo, chief market analyst at S.W. Bach & Co., including Wednesday's read on import and export prices, as well as the Fed's "beige book" and the read on consumer prices later in the week.

As of 6:00 p.m. ET, Nasdaq and S&P futures pointed to a flat open for stocks Wednesday, when fair value is taken into account.

Goldman Sachs (up $8.70 to $149.42, Research) jumped 6.2 percent after reporting first-quarter earnings and revenue that rose from a year earlier and trounced estimates.

Goldman's strong earnings -- as well as the falling Treasury bond yields -- gave a boost to the broader bank sector.

The Amex Securities Broker/Dealer (Charts) index gained 2.4 percent.

In addition to Goldman, other components on the rise included Bear Stearns (up $3.41 to $134.53, Research), Morgan Stanley (up $1.24 to $60.03, Research) and Lehman Brothers (up $3.08 to $145.30, Research), which all added more than 2 percent.

However, gains were broad based, with 25 out of 30 Dow issues closing higher, led by 3M (up $1.44 to $73.53, Research), Home Depot (up $0.89 to $42.14, Research) and Alcoa (up $0.51 to $29.60, Research).

Component Exxon Mobil (up $1.17 to $60.81, Research) added two percent, as part of a broader rally in the oil stocks.

The Philadelphia Oil Service (Charts) sector index added 2.6 percent.

The Dow's big decliner was Procter & Gamble (down $1.97 to $60.01, Research), which lost 3 percent after issuing a milder-than-hoped-for third-quarter profit outlook late Monday.

The consumer products maker said sales would rise 5 to 6 percent versus an earlier projection of as much as 7 percent. The company also said earnings per share would be between 59 and 61 cents, versus analysts' forecasts for 61 cents.

Among other movers, home building shares jumped, with the Dow Jones Home Construction (up $40.37 to $879.77, Research) index adding 4.8 percent.

Technology shares were among the big gainers.

The influential chip sector surged, with the Philadelphia Semiconductor (up 11.15 to 511.08, Charts) index, or the SOX, up 2.2 percent.

Internet shares rose, led by Google (up $14.10 to $351.16, Research), which jumped more than 4 percent amid the latest developments in a closely-watched case that has raised concerns about Internet privacy.

A judge in the case indicated that the search leader will have to turn over a scaled-back amount of information to the U.S. government as part of a look at online child pornography.

Market breadth was positive. On the New York Stock Exchange, winners topped losers by close to three to one on volume of 1.56 billion shares. On the Nasdaq, advancers edged decliners by more than three to two on volume of 1.94 billion shares.

February retail sales fell a more-than-expected 1.3 percent, after rising 2.3 percent in January. Sales excluding autos eased 0.4 percent in February, a narrower drop than what Wall Street economists were expecting, on average.

However, the weaker report may have helped stocks Tuesday, as it furthered bets that the Federal Reserve may not need to raise interest rates much longer.

The current account gap surged to a record $804.9 billion in 2005, the Commerce Department said.

U.S. light crude oil for April delivery added $1.33 to settle at $63.10 a barrel on the New York Mercantile Exchange, a gain of more than two percent. Crude gained 3 percent Monday.

Treasury prices rallied, lowering the yield on the benchmark 10-year note to 4.69 percent from 4.77 percent late Monday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar was weaker versus the euro and the yen.

COMEX gold for April delivery rose $5.50 to settle at $553 an ounce.

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