U.S. stocks jump after heavy selloff

U.S. stocks rebounded sharply Tuesday, as investors sought out bargains after the Dow Jones Industrial Average's worst three-session drop.

At midday, the Dow Jones Industrial Average surged 384.62 points, or 2.42 percent, to 16,255.97. The S&P 500 gained 46.94 points, or 2.48 percent, to 1,940.15. The Nasdaq Composite Index spiked 153.63 points, or 3.39 percent, to 4,679.88.

The Nasdaq Composite Index leaped more than 3 percent as Chinese stocks such as JD.com and Baidu led advancers. Shares of Alibaba, the Chinese e-commerce giant, rose 4.18 percent in the early trading.

The People's Bank of China (PBOC), China's central bank, announced Tuesday a cut in the reserve requirement ratio (RRR) and lower key interest rates.

Wall Street cheered the move, which was described in a PBOC statement as "promoting restructuring" to "stabilize the real economy."

Investors also kept an eye on new home sales and U.S. consumer confidence index.

U.S. sales of new single-family houses in July were at a seasonally-adjusted annual rate of 507,000, said the Commerce Department Tuesday.

U.S. consumer confidence index for August came in at 101.5, up from 91.0 in July, according to the New York-based research group Conference Board Tuesday.

U.S. stocks plunged Monday, with the Dow Jones Industrial Average diving more than 500 points, as a rout in global markets continued to intensify.

All three major Wall Street indexes fell into correction mode over the past two sessions.

The CBOE Volatility Index, often referred to as Wall Street's fear gauge, soared 45.34 percent to end at 40.74 Monday. Enditem