Investors have been shocked in recent days as jitters about the withdrawal of U.S. monetary stimulus and slowing Chinese growth have cut into investor confidence in markets from Istanbul to Kiev to Buenos Aires.
Standard & Poor's cut Ukraine's credit rating further into "junk" territory on Tuesday, citing escalating political instability.
The Federal Reserve began a two-day meeting, after which it is expected to trim another $10 billion from the $75 billion it currently spends each month on buying bonds to support the U.S. economy.
On Wall Street, the S&P 500 closed higher for the first time in four sessions. Apple shares, however, slid a day after the largest U.S. company by market value reported quarterly earnings.
"Emerging markets are doing poorly and that brings you back to the U.S. stock market and that's why you are seeing buyers come in, with the thought the selloff was an opportunity to re-establish positions," said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.
"I don't think there will be (contagion), absent something much more material to the investing thesis around the world."
The Dow Jones industrial average rose 90.68 points or 0.57 percent, to 15,928.56, the S&P 500 gained 10.94 points or 0.61 percent, to 1,792.50 and the Nasdaq Composite added 14.354 points or 0.35 percent, to 4,097.962.
U.S.-dollar denominated Nikkei futures rose 1.1 percent and a gauge of global equities rose 0.4 percent, the most since January 15.
European stocks, and especially those in eastern and southern Europe, were seen as possible beneficiaries from the recent flight out of emerging market assets, thanks to improving growth prospects and still low valuations.
"No need to bottom-fish in emerging markets just yet. We still find the euro zone recovery theme to be more interesting," said JPMorgan European equity strategist Mislav Matejka.
European shares were up the most in nine sessions, with a 0.6 percent gain.
U.S. Treasuries prices edged up. Data that showed orders for U.S. durable goods fell in December spurred safe-haven bids, but nervousness ahead of the Fed's meeting capped gains.
"Traders just want to see what the Fed's going to do," said George Goncalves, head of U.S. rates strategy at Nomura Securities International in New York.
Benchmark 10-year notes were last up 6/32 in price to yield 2.746 percent, compared to 2.766 percent late on Monday.
CURRENCIES LESS VOLATILE
Investors poured cash into developing economies when emergency rate cuts during the financial crisis meant U.S., European and other developed-market bonds offered little yield, comparatively. They are now pulling that money back out as prospects re-emerge of higher developed-market rates.
The Turkish lira rose for a second day against the U.S. dollar ahead of the interest-rate decision expected at midnight in Istanbul (2200 GMT). It was up 1.2 percent at 2.2520 per dollar, compared with a record low of 2.3900 hit on Monday.
A Reuters poll showed analysts expect the Turkish central bank to lift rates by 225 basis points despite its reluctance to unsettle Turkish voters ahead of elections this year.
"We think there is room for the central bank to use more conventional monetary policy and that is clearly what the market expects," said Fergus McCormick, head of sovereign ratings for rating agency DBRS.
The lira has risen more than 3 percent in the last two sessions, which could leave it vulnerable to a selloff after the central bank's statement.
India surprised markets earlier with a rate hike of its own.
Major currencies weakened against the U.S. dollar after data showed U.S. consumer confidence rose in January, with Americans more optimistic about both business conditions and the job market.
The euro was little changed at $1.3668 and the yen fell 0.3 percent at 102.87 per dollar.
In support of the single currency, euro zone banks borrowed enough cash from the European Central Bank on Tuesday to keep overnight money market rates subdued and quell speculation of imminent monetary policy easing.
With Turkey expected to raise rates and the hike by India's central bank, more emerging market central banks are expected to tighten policy in a bid to stabilize their tumbling currencies.
Brazil, South Africa and Indonesia - some of which have been dubbed the Fragile Five economies, with a strong reliance on external capital - are main candidates. South Africa's central bank meets on Wednesday.
In commodities markets, Brent crude oil climbed 0.7 percent to $107.40 a barrel ahead of an expected drop in U.S. distillate inventories as consumers burn heating oil during a bitter northern hemisphere winter. U.S. crude jumped 1.6 percent to $97.26.
Three-month copper ticked down 0.1 percent, its fifth daily decline in a row, and was trading near its lowest in seven weeks.
(Reporting by Rodrigo Campos, additional reporting by Sam Forgione in New York and Sudip Kar-Gupta in London; Editing by Dan Grebler and Nick Zieminski)
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