The Dow Jones Industrial Average Index closed higher on Tuesday, driven by solid earnings from industrial companies, while the dollar index was little changed after reports of Republican senators' support for John Taylor as Federal Reserve chair.

The dollar index rose 0.01 percent, up from an earlier low, as a Bloomberg report on support for Taylor offset diminished hopes for a passage of a major tax cut.

Optimism for a tax overhaul slipped after a CNBC report, citing an aide of Senate leader Mitch McConnell, that three GOP Senators may not back the Republican tax bill.

The Bloomberg report also pushed 10-year U.S. Treasury note yields to a more than five-month high. Benchmark 10-year notes last fell 13/32 in price to yield 2.4226 percent, from 2.375 percent late on Monday.

The 30-year U.S. Treasury bond last fell 28/32 in price to yield 2.9348 percent, from 2.89 percent late on Monday.

Earnings from Caterpillar Inc and 3M helped push the Dow Industrials up 167.8 points, or 0.72 percent, to 23,441.76.

The world's largest construction and mining equipment maker, Caterpillar Inc, beat third-quarter profit and sales estimates and raised its full-year forecasts. The Peoria, Illinois company expects revenue in its construction business to surge about 20 percent and its mining business to jump 30 percent. The company's stock gained 5.0 percent.

3M, another Dow component, which makes a range of products such as autoparts and office supplies, reported upbeat results, helping its stock rise 5.9 percent.

Earnings have gotten off to a strong start, with 73 percent of 120 S&P companies beating profit expectations as of Tuesday.

The S&P 500 gained 4.15 points, or 0.16 percent, to 2,569.13 and the Nasdaq Composite added 11.60 points, or 0.18 percent, to 6,598.43.

European shares ended mixed at their close on Tuesday in anticipation of Thursday's European Central Bank meeting.

"While the ECB is widely expected to announce a reduction, the size and duration of it are still unknown, which could cause a lot of volatility on the day and determine how the euro reacts," said Craig Erlam, a senior market analyst for OANDA in London, in an email.

Although the German, French, Italian and Spanish indexes all rose, the pan-European STOXX 600 closed down 0.4 percent.

The pan-European FTSEurofirst 300 index lost 0.30 percent and MSCI's gauge of stocks across the globe gained 0.03 percent.

Apple supplier and chipmaker AMS jumped 21.8 percent after reporting third-quarter sales just under expectations. Analysts said strong fourth-quarter guidance from the iPhone supplier offset the miss.

Strong profits from Spain's Caixabank also lifted the IBEX 0.4 percent after its Catalonia-related underperformance.

Japan's Nikkei had extended its 16-day winning streak to a 21-year peak overnight following the weekend election win for Prime Minister Shinzo Abe.

The New Zealand dollar hit a five-month low after the incoming Labour-led coalition government said it plans to review and reform the Central Bank Act to include employment, alongside inflation, as a dual target.

Spot gold dropped 0.4 percent to $1,276.82 an ounce, remaining near a two-week low.

U.S. crude rose 1.08 percent to $52.46 per barrel and Brent was last at $58.34, up 1.69 percent.