The increase wiped out more than half of the market's plunge from the day before.
The Dow Jones industrial average rose 157 points to 14,756 Tuesday, a gain of 1 per cent. It dropped 265 on Monday.
The Standard & Poor's 500 closed up 22 points at 1,574, or 1.4 per cent. It was the biggest increase since Jan. 2.
The Nasdaq rose 48 points, or 1.5 per cent, to 3,264.
Coca-Cola jumped 6 per cent after reporting strong results. The government reported that home construction surged last month.
Five stocks rose for every one that fell on the New York Stock Exchange. Volume was average at 3.6 billion shares.