U.S. stocks jumped about 2 percent on Tuesday, attempting a bounce after the Dow's worst three-day point drop in history, as a recovery in oil prices and overnight easing in China helped investor sentiment.
Stocks surged in the open, with the Nasdaq outperforming, briefly up 3.5 percent as Netflix and Chinese stocks such as JD.com and Baidu led advancers. Alibaba jumped more than 3 percent.
The S&P leaped more than 2 percent in the open to recover from correction territory on an intraday basis. No stocks in the index hit new 52-week highs or lows, after about 200 names hit new 52-week lows Monday.
The Dow Jones industrial average traded about 300 points higher after briefly jumping more than 370 points in the open. Apple surged more than 4.5 percent.
However, the gains fall short of Monday's more-than-3.5 percent plunge and the Dow remains on pace for its biggest monthly percentage loss since February 2009 and the Nasdaq since 2008. The S&P 500 is on track for its largest percentage loss since May 2010.
Some of the things "bothering markets yesterday were China and collapsing commodity prices and both of those have given us some relief and when I look at China I don't look at the Shanghai market. I look at the Hong Kong market," said James Meyer, chief investment officer at Tower Bridge Advisors.
The Hang Seng closed up 0.72 percent, while the Nikkei plunged 4 percent and the Shanghai Composite extended recent losses to fall below the psychologically key 3,000 mark, down 7.6 percent.
Oil prices surged, with crude up more than 3 percent near $39.50 a barrel. Brent also jumped more than 3 percent to above $44 a barrel.
U.S. stock index futures extended gains after the Chinese central bank announced plans early in the morning ET to cut its one year lending rate to 4.6 percent, which the People's Bank of China said was provide long-term liquidity and help support the economy.
"I'm looking for every reason to be a buyer," said Nick Raich, CEO of The Earnings Scout, who remains bearish on equities. "We're not upgrading our view at this point until we see topline growth... until then it's going to be hard to sustain a rally."
In early trade Tuesday, Dow futures spiked above 600 points, implying an open of more than 450 points.
For the rally to be real "if this is the bottom we have to end strong and follow-through tomorrow," Meyer said.
The New York Stock Exchange invoked Rule 48 for the second day in a row, Dow Jones reported.
The exchange used the rule before Monday's open after futures for several major averages hit limit down. The last time the rule was used was during the financial crisis.
Stocks plummeted on Monday, with the S&P 500 joining the other major averages in correction territory. Nine of the 10 sectors are in correction territory, with consumer staples less than 1 percent away.
The Dow had its biggest intraday swing ever, falling as much as 1,089 points in the open on Monday. U.S. stocks closed more than 3.5 percent lower, off session lows in high volume trade as fears of slowing growth in China pressured global markets.
Cumulative trade volume was 13.94 billion shares, the highest volume day since Aug. 10, 2011. Composite trade volume on the New York Stock Exchange was 6.57 billion shares, the heaviest since Oct. 27, 2011.
On the data front, there are a flurry of housing market indicators due Tuesday, with the Case-Shiller home price indices for June showing home prices rose less than expected.
New home sales figures for July came in at an annual rate at 507,000.
The Conference Board's consumer confidence indicator for August came in at 101.5.
In earnings, Best Buy, Toll Brothers and Sanderson Farms reported before the market open.
Best Buy beat estimates by 15 cents with adjusted quarterly profit of 49 cents per share, with revenue also beating forecasts. Same-store sales rose 2.7 percent, compared to the Thomson Reuters forecast of a 1.0 percent increase.
Luxury homebuilder Toll Brothers reported a 12 percent rise in third quarter orders. Earnings and revenue were roughly in line with estimates, although profits were down from a year earlier.
Poultry producer Sanderson Farms posted earnings that fell substantially shy of the $2.90 consensus estimate with quarterly profit of $2.27, while revenue was also below forecasts. The company said a key factor in the quarter's results was continued pricing pressure.
Read MoreEarly movers: BBY, DSW, AAPL, TOL & more
BHP Billiton reported full-year earnings earlier Tuesday which sent shares around 3 percent higher in London. This came despite the mining giant reporting an 86 percent plunge in net profit on the back of falling commodity prices, but investors cheered the group's cost-cutting measures.
The Dow Jones Industrial Average traded up 352 points, or 2.2 percent, at 16,221, with Visa leading all blue chips higher.
The S&P 500 traded up 43 points, or 2.31 percent, at 1,937, with information technology leading all 10 sectors higher.
The Nasdaq traded up 120 points, or 2.67 percent, at 4,692.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 31 after spiking above 50 on Monday, its highest level since February 2009.
About four stocks advanced for every three decliners on the New York Stock Exchange, with an exchange volume of 122 million and a composite volume of 346 million in the open.
Crude oil futures for October delivery jumped $1.02 to $39.26 a barrel on the New York Mercantile Exchange. Gold futures fell $7.50 to $1,146.30 an ounce in morning trade.
U.S Stocks jumped 2% on Tuesday
4/
5
Oleh
Lanka Stocks
