Stocks began September by soaring more than 2.5 percent after strong U.S. and Chinese manufacturing reports relieved some of the mounting worries over the global economy.

The Dow Jones Industrial Average rose 254.75 points, or 2.5 percent to end at 10,269.47.

All 30 Dow components ended higher, led by Bank of America [ BAC 7.13  -0.17 (-2.33%) ], Caterpillar DJIA, [ CAT 91.81  -0.87 (-0.94%) ], and JP Morgan [ JPM 35.60  -0.64 (-1.77%) ].

The S&P 500 ended up 30.96 points, or 2.95 percent, to 1,080.29, and the Nasdaq ended up 62.81 points, or 3 percent, to 2,176.84.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell more than 8 percent, below 24.

All 10 of the key S&P 500 sectors rose, led by industrials, financials and energy stocks.

Wednesday's market action provided welcome relief after the worst August for stocks since 2001. Most strategists were encouraged by the rally and some added that a double-dip is unlikely to happen going forward.

“We think that corporate balance sheets are in good shape,” said Kent Croft, chief investment officer and portfolio manager at Croft Value Fund. “There’s a lot of very high quality selling at a great discount."

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