NEW YORK — Now investors seem to be saying, maybe things aren't so bad after all.

The latest reading on housing and some better-than-expected retail earnings reports drew investors back into the stock market yesterday after the previous day's big selloff. The major indexes rose about 1 percent, led by a surge in financial and technology companies.

The U.S. market was also taking some cues from overseas exchanges, which got a boost from encouraging news about the German economy. And bond prices retreated as investors' anxiety eased.