U.S. stocks jumped Wednesday, following a rally in global markets in an attempt to ease the pain of the worst quarter in four years. ( Tweet This )

The major averages held about1 percent higher after briefly gaining more than 1.5 percent in morning trade, with the Dow Jones industrial average leaping as much as 248.47 points. The S&P 500 recovered to trade above the psychologically key 1,900 level.

The Nasdaq composite traded about 1.4 percent higher. Earlier, the index rose more than 2 percent, helped by gains of as much as 5 percent in the iShares Nasdaq Biotechnology ETF (IBB) (IBB).

IBB pared gains to trade about 2.5 percent higher, holding in a bear market, or more than 20 percent below its 52-week high, after a sharp sell-off in recent weeks.

Apple (AAPL) gained 1 percent.

"Nothing has changed fundamentally from yesterday to today except that most of the globe is rallying with weaker-than-expected data points, with the hope of more stimulus from central banks," said Ryan Larson, head of U.S. equity trading at RBC Global Asset Management.

We want to "see if this is not a short covering rally but retail and institutional buying," he said.



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In pre-market trade, Dow futures were more than 160 points higher, while European markets traded more than 2 percent higher. Asian stocks posted gains, with Japan's Nikkei 225 stock index rallying 2.70 percent.

Soft data in Japan and the euro zone boosted hopes of more stimulus in those regions. Japanese industrial production unexpectedly fell 0.5 percent in August for the second-straight month of declines, government data showed Wednesday.



For the first time in six months , euro zone prices fell in September from the same period last year, according to the European Union's statistics office Eurostat.

Analysts also noted support for Tuesday's gains from continued signs of improvement in the U.S. labor market.



Ahead of Friday's key nonfarm payrolls data, the September ADP Employment report showed private companies added 200,000 jobs .

"I think that's certainly lending some credibility to the gains that are there," said Paul Springmeyer, senior portfolio manager at the Private Client Reserve at U.S. Bank.



"Investors are being more cautious and tactful, hence the heightened levels of volatility. We've been at pretty subdued levels (of volatility). I think any time you see multiple point percentage swings it's an overreaction," he said.

U.S. stocks closed mixed Tuesday, after plunging nearly 2 percent or more on Monday.

Crude oil struggled to rally amid concerns about a hurricane on the U.S. East Coast, news of escalation in the Syrian war, and a report that crude stockpiles rose far more than expected.

Copper spiked amid quarter-end positioning and news of an output cut in Chile . Commodities trading and mining giant Glencore (London Stock Exchange: GLEN-GB) continued to recover with a gain of more than 11 percent.

"It warns of these companies in terms of their debt and how they've managed their balance sheets," said Mark Luschini, chief investment strategist at Janney Montgomery Scott. "That to me is more a symptom of what's happened in the commodity complex than a signal."

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Wednesday is the last day of September and the final day of the third quarter, the worst since 2011 according to Barclays . The major U.S. averages are on track for a quarterly loss of more than 7 percent.

"The third quarter to me reflected uncertainty about the Federal Reserve, the uncertainty caused by not knowing how the central bank is going to raise rates. If you get a good labor report that may steel the nerves of the Fed," said David Kelly, chief global strategist at JPMorgan Funds.

Concerns about spillover from slowdown in China and the timing of a Federal Reserve rate hike sent markets into correction territory, or more than 10 percent below their 52-week highs, in late August.

The major U.S. averages recently fell back into correction mode and were close to retesting the August lows Tuesday. The Russell 2000 held below its Aug. 24 low Tuesday.

"You have increasing chatter about the rally into the year-end and that raises the question, what's going to be the catalyst for that?" Luschini said, noting increasing focus on third-quarter earnings reports following Friday's employment report.