Ambac Financial Group Inc., the second-largest bond guarantor, jumped 48 percent after saying it will present a rescue plan to the Treasury Department. Wal-Mart Stores Inc. and McDonald's Corp. added more than 5 percent as crude slid to the lowest price in 16 months. The Dow Jones Industrial Average reversed a decline of as much as 380 points spurred by the biggest drop in industrial production in 34 years. The index swung by more than 700 points for the sixth straight day.
The S&P 500 advanced 38.59 points, or 4.3 percent, to 946.4. The Dow Jones Industrial Average rallied 401.35 points, or 4.7 percent, to 8,979.26. The Nasdaq Composite jumped 5.5 percent to 1,717.71. About four stocks gained for each that fell on the New York Stock Exchange.
Stocks retreated earlier, sending the S&P 500 down as much as 4.6 percent, after Citigroup Inc. said bad loans may rise to a record high and the government said industrial production slumped 2.8 percent in September.
The Canadian Standard & Poor's/TSX Composite Index finished the day 0.29 percent lower at 9,296.38 after slinding as much as 6 percent earlier.
Brazilian stocks fell, heading for the lowest level in two years, on concern a decelerating global economy will hurt demand for commodities and slow profit growth. The Bovespa slid 1 percent to 36,470.
Stocks declined also in Asia and Europe, with benchmark indexes from Tokyo to Budapest falling more than 4 percent, on growing concern bank bailout plans in the U.S. and Europe will fail to avert a global recession.
U.K. stocks slumped for a second day as investors speculated a global bailout of banks has failed to stave off recession. BHP Billiton Ltd., Rio Tinto Group and Royal Dutch Shell dropped as oil and metals prices decreased. The benchmark FTSE 100 slipped 218.2, or 5.35 percent, to 3,861.31
German stocks dropped for a second day as concern mounted that bank bailouts in the U.S. and Europe will fail to prevent a recession. The benchmark DAX Index dropped 238.82, or 4.9 percent, to 4,622.81.
Japanese stocks plunged the most in two decades. The Nikkei 225 Stock Average declined 1,089.02, or 11 percent, to close at 8,458.45 in Tokyo, the second-steepest plunge in its 59-year history.
Australia's stocks dropped amid growing evidence the nation's 17-year economic expansion will end, as Ford Motor Co. said it will cut 450 local jobs and National Australia Bank Ltd. said profit fell. Australia's benchmark S&P/ASX 200 Index plunged 6.7 percent to 4,013.40 at the close, eroding a rebound from a 16 percent loss last week, the worst in its history dating back to 1992.
China's stocks fell, driving the benchmark index to a 22-month low, as commodity producers and airlines declined on concern the global economy is headed for a recession that will curb Chinese exports. The CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, sank 93.45, or 4.9 percent, to 1,820.90 at the close, the lowest close since December 2006
Indian stocks fell, with the benchmark Sensitive Index declining to its lowest in almost a week, after U.S. retail sales fell more than estimated. The Bombay Stock Exchange's Sensitive Index, or Sensex, fell 227.63, or 2.1 percent, to 10,581.49. It earlier fell as much as 7.3 percent.
Russian stocks fell to the lowest in three years, led by OAO Rosneft and OAO Lukoil, as sinking oil prices hurt the outlook for Russia's economy and equities dropped around the world. The Micex Index fell 11 percent to 616.72 at 4:12 p.m. in Moscow, the lowest since June 2005. The Micex Stock Exchange halted trading for an hour because of the slump.