Stocks in the United States staged a late rally on Tuesday after a choppy session.
Shares in Hewlett-Packard rose by 14.5% to end at $US33.59 on the New York Stock Exchange.
International Business Machines Corp rose 3.4% to $US80.08.
However, shares in Citigroup fell by 6% to a 13-year low of $US8.36, on concern that a plan to cut 52,000 jobs might not be enough to return the bank to health. Citigroup is the second-largest bank in the United States.
Shares of General Motors Corp ended down 2.8% at $US3.09 while the executives of the "Big Three" automakers were in Washington to ask the US Senate for approval for a bailout. Ford was down 2.3% at $US1.68.
Earlier, Treasury Secretary Henry Paulson told a House Financial Services Committee hearing that the $US700 billion bailout fund should not be used to prevent the failure of automakers.
On the Nasdaq, Yahoo rose 8.7% to $US11.55 after the departure of CEO Jerry Yang renewed hopes that it would clear the way for a deal with Microsoft Corp.
The Dow Jones industrial average rose 151.17 points, or 1.83%, to 8,424.75.
Standard & Poor's 500 Index gained 8.37 points, or 0.98%, to 859.12. The Nasdaq Composite Index added just 1.22 points, or 0.08%, to 1,483.27.
Trading volume was moderate on the New York Stock Exchange, with about 1.60 billion shares changing hands. About 2.43 billion shares were traded on the Nasdaq.
European markets
In Britain, the FTSE 100 index was up 76.39 points, 1.9%, at 4,208.55.
The index shed 2.4% on Monday, and is still down 36% for the year to date.
European shares ended higher after a choppy session. The FTSEurofirst 300 index was 0.95% higher at 845.37 points. It is down 44% to date this year.
In Frankfurt, the DAX index ended at 4579.47 points, up 22.2 or 0.49%.
In Paris, the CAC-40 index closed at 3217.4 points, up 35.37 or 1.11%. The Swiss market index closed at 5675.58 points, up 29.15 or 0.52%.
