The Dow Jones Industrial Average advanced 90.11 points, or 1.1 percent, to 8,552.96.
"On a short-term basis, I think we saw the bottom Tuesday," said Richard Dickson, technical analyst at Scott & Stringfellow Inc. "It's probably most important that they rallied the market initially Wednesday morning, brought it back almost to even, and then rallied higher. I think a lot of people perceive that, and the perception is the important thing here."
The utility sector rolled up a big advance. Retail issues, with a relatively small exposure to slowing Asian economies, and the technology sector, also shared top-performer honors.
The volume slackened from the pace set in Tuesday's decline.
On Tuesday, the yen tumbled to levels not seen in eight years against the U.S. dollar sparked a worldwide selloff in financial markets. The worry among investors is that Japan is doing too little, too late to repair its badly damaged economy and financial system.
A weaker yen makes Japanese goods and services cheaper when compared with those of other nations. It also puts pressure on other Asian countries to devalue their currencies so as to remain price competitive.
In particular, the markets fear that a further yen slide will force China to devalue its yuan, which might launch another round of currency devaluations throughout Asia.
U.S. corporations are affected by developments in the currency market since domestically produced goods are less competitive price-wise vs. their Asian counterparts when the U.S. dollar appreciates in value.
On Wednesday, cooler heads prevailed worldwide as comments by Japan Finance Ministry vice minister for international affairs, Eisuke Sakakibara, revived the yen. Sakakibara suggested Japan might intervene in the currency market to support its currency.
In Wednesday's market highlights:
- The Standard & Poor's 500 Index rose 1.4 percent.
- New York Stock Exchange winners beat losers by almost 2.5 to 1.
- On the Big Board floor, turnover dwindled 8 percent to 713 million shares.
- The Nasdaq Composite advanced 1.8 percent. Advancing issues led decliners by better than 3 to 2 in the Nasdaq Stock Market. Volume totaled 706 million shares.
- The Russell 2000 Index of small-capitalization stocks rose 2.0 percent.
- The 30-year Treasury declined 6/32, to yield 5.617 percent.