U.S. stocks rallied on Wednesday, with the S&P 500 and Dow Jones Industrial Average recording their best one-day percentage gain in more than 5 weeks.
The rebound snapped a 3-day losing streak that has been blamed in part on worries about global growth and fighting in Iraq and Syria.
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A stronger-than-expected report on new-home sales and dovish comments from two Federal Reserve officials, may have contributed to gains.
The S&P 500(SPX) gained 15.63 points, or 0.9%, to 1,998.38. Broad-based gains were led by health care and consumer staples sectors.
The Dow Jones Industrial Average(DJI) gained 155.02 points, or 0.9%, to 17,210.89, recovering some of the steep losses from the previous two sessions.
Meanwhile, the tech-heavy Nasdaq Composite (RIXF) added 46.53 points, or 1.03%, to 4,555.22, while the small-cap Russell 2000 (RUT) -- which has lagged behind the other indexes this month and this year -- gained 8.9 points, or 0.8%, to 1,127.60.
(Read more in Need To Know: Investors, media fixated on imploding small-cap stocks http://www.marketwatch.com/story/gold-10000-and-why-golden-is-worse-than-death-when-it-comes-to-crosses-2014-09-24.)
Trading rebound: Wednesday's early advance may have been more of a trading rebound than anything else, said Colin Cieszynski, chief market strategist at CMC Markets.
"Economic news flow has been light," he said in a note, adding that "monetary policy direction (more dovish in Europe, more hawkish in the US) hasn't really changed."
Today's key economic news: The Commerce Department said sales of new single-family homes surged 18% in August to a seasonally adjusted annual rate of 504,000, the fastest pace in more than six years. Economists polled by MarketWatch had expected a sales rate of 426,000.
Investors welcomed dovish remarks from two Fed officials. The Federal Reserve should be "exceptionally patient" before hiking short-term interest rates - even to the point of allowing a modest overshoot of its inflation target, said Charles Evans, the president of the Chicago Fed.
The economy is returning to more normal territory and the Fed is prudently planning for the exit from its zero-rate policy stance, said Loretta Mester, the president of the Cleveland Fed
Movers and shakers: Bed Bath & Beyond (BBBY) shares climbed more than 7.4% to lead the S&P 500 after the home-furnishings retailer late Tuesday posted better-than-expected quarterly earnings.
KB Home (KBH) fell 5.30%, after the home builder reported fiscal third-quarter profit and sales that fell well short of expectations.
(Read more in the Movers & Shakers column http://www.marketwatch.com/story/bed-bath-beyond-kb-home-jabil-likely-in-focus-2014-09-24.)
Other markets: Japan's Nikkei Average shed 0.2%. Meanwhile, the dollar fell against the yen (USDJPY) after Japan's prime minister said he's cautious about the yen's recent weakness.
European stocks mostly gained after initially wavering following a sluggish reading on German business confidence. Gold futures (GCZ4) dipped, and oil futures(CLX4) were slightly higher.