A barrage of bargain hunting swept Wall Street late Tuesday, sending the Dow to its second best one-day point jump in history. 

Today's Market

The Dow Jones Industrial Average rose 889.35 points, or 10.88%, to 9065.12, the broader S&P 500 added 91.58 points, or 10.79%, to 940.50 and the Nasdaq Composite picked up 143.57 points, or 9.53%, to 1649.47. The consumer-friendly FOX 50 gained 74.28 points, or 11.33%, to 730.04.

"Hopefully today will be the beginning of something positive," NYSE trader Frank Chester of Christopher J. Forbes told FOX Business.

The monster rally was only matched by the 936-point surge on October 13. On a percentage basis, the gains translate to the index's sixth best one-day performance ever and the second best of the year. For the Nasdaq Composite, the rise marked the fourth best one-day gain in the index's history. 

While there was no clear catalyst for the massive late-day rally, it came a day before the Federal Reserve is widely expected to slash interest rates. 

“It was pretty hard to figure out why we were up 400 points...let alone up 900 points,” said Michael James, senior equities trader at Wedbush Morgan Securities. “Sellers completely walked away and there was a massive scramble to buy stocks…It was feeding on itself in the last half hour.”

Despite lacking an obvious catalyst, the markets clearly were helped by optimism that began overseas with surging global stock markets. That optimism helped break a month-long trend of markets plunging in the final minutes of trading. Indeed, stocks did the opposite on Tuesday, ending at session highs. 

“It's just a bounce back. I think it’s a rally off what was a severely oversold condition," said Kenneth Polcari, managing director at ICAP Equities. 

All 30 stocks on the Dow ended the day with huge gains of at least 6%. In fact, 21 blue-chip stocks soared by double-digit percentages on Tuesday, led by aluminum maker Alcoa (AA), Boeing (BA) and Citigroup (C).

The rally was badly needed as stocks have been in a historic slide this month that has landed the major indexes at 5-1/2 year lows. In fact, the Dow ended in the green for just the fifth time this month and the Nasdaq Composite broke a five day losing streak. 

Tuesday marked just the tenth one-day jump of 10% or more in the Dow's history and the second of the month -- the shortest time between 10% gains ever.

There were several bullish factors on Tuesday, though none significant enough to trigger a massive rally on their own. Earnings reports largely beat Wall Street's lowered expectations, with better-than-expected results from U.S. Steel (X), Valero (VLO) and McGraw-Hill (MHP) and the action overseas.

Interest rate hopes also helped lift the markets as Wall Street widely expects the Fed to slash rates by half a percentage point amid more dreary economic headlines and tumbling stock markets.

“I think for the market sentiment... it’s important the Fed does cut rates so it indicates it’s doing something. Inaction would be more detrimental to the market," said James. 

The wave of optimism began in Asia where Hong Kong's Hang Seng index surged 14% and a 6% Japan's Nikkei jumped 6%. The huge gains were fueled in part by the cooling yen, which fell 2% against the dollar -- a welcome sign for those worried the Japanese currency has strengthened too much. 

Asian markets stayed hot late Tuesday as the Nikkei 225 surged by 1,000 points -- forcing trading to be halted  due to a "limit up" threshold in Chicago Mercantile Exchange trading. 

European markets also saw solid gains following better-than-expected earnings from oil giant BP (BP). London's FTSE 100 ended up 1.9% while Germany's DAX soared 11.3% and Paris' CAC 40 was up 1.6%. 

Meanwhile, crude oil futures fluctuated along with the equities markets. Oil prices closed down 49 cents to $62.73 a barrel.

The lower oil prices did little to halt surging energy stocks, which jumped more than 11% as a sector. 

Data Dump

The markets essentially ignored an ominous report from the Conference Board showing consumer confidence plunged to an all-time record low of 38.0 in October from 61.4 the month before. Economists had expected a much more modest decline to 55. 

Tuesday's lone housing report provided more evidence of plunging home prices. The S&P/Case-Shiller 10-city home price index fell 17.7% in August from the year before while its 20-city index was off by 16.6% from 2007.  

Corporate Movers

General Motors (GM) could receive a $5 billion loan from the Energy Department to help the auto maker merge with privately-held Chrysler LLC, The Wall Street Journal reported. The loan, which would be part of $25 billion in funds approved by Congress for Detroit earlier this year, is needed to help cover $10 billion in expected merger costs, the newspaper reported. 

Goldman Sachs (GS) and Morgan Stanley (MS) had been under heavy pressure on rumors they were stuck on the wrong end of trading positions in Volkswagen. However, a Goldman source told FOX Business rumors the bank has a large short position against Volkswagen are "unfounded." A Morgan spokesman said the firm has "virtually no exposure" to Volkswagen or hedge fund Citadel. 

Boeing (BA) said it reached a tentative deal with the Machinists union, potentially ending an eight-week strike that analysts say has cost Boeing $100 million a day. 

Fifth Third Bancorp (FITB) said it received preliminary approval for a $3.45 billion investment from the federal government, a move that will add to the bank's “flexibility in considering strategic opportunities.” The Cincinnati-based bank also said it sees generating $1 billion through non-core asset sales.

BP (BP) soared double-digit percentages after the British oil company widely beat expectations with an 83% surge in third-quarter adjusted-profit to $8.9 billion. BP’s revenue jumped 45% to $103.2 billion.

ExxonMobil (XOM) briefly lost its status as the world’s biggest company on Tuesday to German car maker Volkswagen.

General Electric (GE) tested the Fed’s commercial-paper facility on Monday by borrowing less than $5 billion, the Financial Times reported. GE is one of the largest participants in the short-term credit market that froze earlier this month.

Target (TGT) saw its stock jump after a major shareholder said it will publicly present a suggested transaction for the company. However, Target released a statement saying it has not yet reached a conclusion on the undisclosed potential transaction and that the shareholder's proposal "raises serious concerns." 

McGraw-Hill (MHP), the largest publisher of textbooks and owner of ratings company Standard & Poor's, posted a better-than-expected profit of $1.28 a share, down from $1.34 a share a year ago. However, the company cut its 2008 outlook and issued a fourth-quarter forecast that missed expectations.

Royal Caribbean (RCL), the world's second-largest cruise operator, beat the Street with third-quarter earnings of $1.92 per share but warned its bookings have weakened recently due to "economic and financial turmoil."

Apria Healthcare (AHG) surged 50% after saying it expects its merger with a unit of the Blackstone Group (BX) to close on Tuesday.