(MENAFN- Arab News) NEW YORK: Markets rebounded on Tuesday with world stocks oil prices and bond yields all rising after China cut interest rates and banks' reserve requirements in a bid to kick-start its wavering economy.

Wall Street opened more than 2-percent higher recouping some of its losses from the previous day's selloff its worst in four years which had put the S&P 500 and Nasdaq composite indexes in correction territory.
The dollar motored ahead against most major currencies rising 1.2 percent against the yen and 1.3 percent against a basket of major currencies as the stimulus boost to China economy renewed focus on US economic data and a potential Federal Reserve rate hike this year.
Global markets had been pummeled on Monday after Chinese shares fell almost 9 percent prompting investor calls for remedial action from authorities that grew louder overnight after the Shanghai Composite Index slumped.
Economists said Tuesday's response a 25 basis point cut in key rates and 50 bps off the reserve requirement rate for large commercial banks sent a clear signal that Beijing which has stepped in several times this year to keep China's growth on track was still willing to intervene.
But as asset prices eased back following the initial euphoria some questioned whether the measures would help.
"What we need to see to calm investors is positive economic data points out of China and only when we see that will the rallies be sustainable" said Xavier Smith investment director at Centre Asset Management in New York.
While the previous day's rush for safety reversed US Treasuries prices fell on Tuesday as China's move reduced investor anxiety about its economy and sparked selling of U.S. government debt and other perceived safe-haven assets.
At 11:36 a.m. the Dow Jones Industrial Average rose 381.28 points or 2.4 percent to 16252.63 the S&P 500 gained 47.21 points or 2.49 percent to 1940.42 and the Nasdaq Composite added 149.35 points or 3.3 percent to 4675.60.
"Institutional buyers are seeing this as oversold conditions and buying opportunities" said John O'Brien managing director head of West Coast at MKM Partners LLC in Newport Beach California. "It's relatively quiet now we're an hour and a half into the day kind of a typical trading day."
The CBOE Market Volatility Index at 29 was still elevated on Tuesday indicating lingering uncertainty but it was far below the previous day's high of 53.3 which was the highest level since January 2009.
The pan-European FTSEurofirst 300 index closed up 4.4 percent in its biggest one day gain in almost four years recouping much of the 5-percent-plus lost the previous day when around 450 billion euros ($520 billion) was wiped off the FTSEurofirst 300's value.
MSCI's benchmark emerging stocks index was up 2.5 percent on track for its biggest jump in just over two years after seven days of back-to-back falls.
Crude oil and metals markets also responded to Beijing's move as China one of the world's biggest commodities consumers.
US crude futures traded up 2.9 percent at $39.33 per barrel while Brent rose 2.3 percent to $43.62.
But global oversupply and worries over the severity of the slowdown in China kept oil prices near the 6-1/2-year lows they fell to on Monday when the market slumped 6 percent.
Copper often considered a proxy for global economic activity rose 2.1 percent.
In China where market volatility has been at its most extreme the central bank's policy move - coming after a shock devaluation of the yuan two weeks ago drew a guarded reaction.
"This is a big-bang move ... Frankly (it) shows a bit of panic in my mind" said Andrew Polk resident economist at the Conference Board in Beijing.