The stock market's gain Tuesday was the bond market's loss, as some investors dumped fixed-income securities to buy equities.
Meanwhile, the dollar tumbled further against the Japanese yen as hedge funds continued to repay yen loans used to finance sinking emerging-market investments.
And the Malaysian ringgit surged against the dollar after the country said it would impose new foreign exchange controls--which promptly sent the Malaysian stock market to a 10-year low.
Wall Street's big news, of course, was the stock rebound from Monday's massive sell-off.
The Dow Jones industrials rose 288.36 points, or 3.8%, to 7,827.43, recouping a little more than half of Monday's 512-point plunge.
New York Stock Exchange volume reached a record 1.204 billion shares, up from 915 million on Monday.
The market was led by some of the same stocks that had led it down on Monday--namely, major technology issues. Dell Computer soared $8.38 to $108.38, after diving $18.75 on Monday. America Online gained $3.06 to $85 after plunging $14.31 on Monday.
"There was a legitimate deploying of funds because stocks have gotten very cheap very quickly, and there was some short-covering," said Scott Bleier, chief investment strategist at Prime Charter Ltd.
"The sellers have been washed out. Everyone has now factored in the risks of a weak political scene, Asia and Russia. The market now begins to climb a wall of worry," he said.
Others aren't so sure. In any case, the Dow--which at its low on Tuesday was off more than 20% from its July peak, meaning it crossed the "official" bear market threshold--still is in the red for the year, down 1% year-to-date.
In the bond market, where long-term Treasury yields have been sinking to record lows, sellers took over Tuesday.
U.S. bonds posted their biggest loss in 2 1/2 months as stocks soared and investors balked at relatively minuscule Treasury yields.
The yield on the 30-year U.S. Treasury bond rose to to 5.34% from 5.27% on Monday, pushing its price sharply lower. Bond prices had surged in recent weeks as turbulence in financial markets around the world sent investors rushing to Treasuries as a haven.
In currency trading, the dollar sank to 139.25 yen from 140.78 on Monday as technical factors continued to buoy the Japanese currency.
The Malaysian ringgit rose 4% against the dollar after the Malaysian central bank halted offshore ringgit trading and imposed new currency controls.
But that was murder on Malaysian stocks, which dove more than 13%.
In the battered commodity markets, prices rebounded from 21-year lows, led by gold and copper. The CRB-Bridge index of 17 commodities ended 2.99 points higher at 198.67.
Gold for delivery in December ended $3.30 higher at $282.20 an ounce; December silver rose 11.2 cents an ounce to $4.79.
Market Roundup, D9