Stock prices ended mostly higher worldwide on Tuesday as bargain hunters took control after several days of heavy selling.
In other markets, U.S. Treasury bond yields edged lower after the government's sale of new three-year notes appeared to attract healthy bidding from foreign investors.
On Wall Street, the Dow Jones industrial average climbed 29.45 points, or 0.3%, to 10,019.47, the first gain in five sessions.
The Dow's modest rise understated the strength of the day's advance. The broader Standard & Poor's 500 index was up 8.33 points, or 0.8%, to 1,095.45, as rising stocks outnumbered losers by about 4 to 1 on the New York Stock Exchange.
The technology-dominated Nasdaq composite index jumped 35.28 points, or 1.9%, to 1,931.35.
The Russell 2,000 index of smaller stocks surged 10.81 points, or 2%, to 548.67.
Share prices had fallen sharply in recent weeks on concerns that the U.S. economy's strength would force the Federal Reserve to begin tightening credit soon.
Those fears had driven Treasury bond yields to 22-month highs, in turn undercutting the appeal of stocks to some investors -- even though first-quarter corporate earnings reports have been robust.
"Right now, you're seeing the markets pause a bit. I think we're re-evaluating the sell-off to see if it's been an overreaction to interest rates," said Stephen Sachs, director of trading for Rydex Investments.
The Dow had fallen 5.4% from April 5 through Monday, when it hit a five-month low. Other major indexes also were at their lowest levels since late last year.
Many analysts said the market was overdue for a bounce. But some say it isn't clear that stocks can stabilize for long, given interest rate worries and concerns about oil prices, Iraq and other geopolitical issues.
"This is a period of extreme uncertainty," said Brian Bruce, director of global investments at PanAgora Asset Management. "Earnings have been fabulous. If you focus on that, things are attractively priced. If you're concerned about rates and the uncertainty there, then the market trades down because the uncertainty means more risk."
The bond market caught a break Tuesday as the Treasury sold $24 billion in three-year notes at a yield of 3.20%.
So-called indirect bidders, which include foreign central banks, were awarded 45.6% of the notes, down slightly from 46.8% at the last three-year note auction in February but up from 37.4% at November's sale, according to Bloomberg News.
Analysts have been concerned that foreign investors might begin to shy away from U.S. bonds, given expectations that the Fed would be raising short-term rates this summer.
But "foreigners are not throwing in the towel," Bulent Baygun, head of U.S. fixed-income strategy at Barclays Capital, told Bloomberg News.
The Treasury will sell $15 billion of five-year notes today and $15 billion of 10-year notes on Thursday.
The results of Tuesday's auction helped drive bond yields lower. The yield on the existing 10-year T-note fell to 4.75% from 4.79% on Monday, which was the highest since July 2002.
Bond investors also were calmed by comments from Anthony Santomero, president of the Federal Reserve Bank of Philadelphia, who said the central bank intended to raise rates gradually when it finally begins to tighten credit.
Among Tuesday's market highlights:
* In foreign trading, most European markets were up between 1% and 2%. Japan's Nikkei-225 index added 0.2%.
* Technology shares were broadly higher. Intel gained $1.22 to $27.77, Apple Computer rose 86 cents to $27.14, and Qualcomm jumped $1.09 to $64.72.
* Among industrial and commodity stocks, nickel miner Inco rose 73 cents to $30.40, Eaton jumped $1.96 to $57.15 and Whirlpool added $1.62 to $63.72.
* Altria, the parent of cigarette maker Philip Morris, lost $1.49 to $53.40 after the company said full-year profit would be somewhat below expectations because of costs of a preliminary settlement with the European Commission over cigarette-smuggling charges.
* Walt Disney rallied 88 cents to $22.98 after brokerage UBS upgraded the stock to "buy" from "neutral," citing an improving theme-park business and other positive trends. Disney is expected to report quarterly financial results today.
Also in the entertainment sector, Viacom class B shares jumped $1.99 to $38.87, after hitting a 52-week low on Monday.
Market Roundup, C7