U.S. stocks rose on Wednesday, lifting the Nasdaq up more than 2 percent, as investors snapped up technology shares following the market's two-day sell-off.

News of government aid for insurers added to the positive tone, along with a proposed takeover in the home building sector.

Microsoft Corp , up 4 percent, was the top boost on Nasdaq, while IBM , up 2.5 percent, bolstered the Dow.

The Dow Jones industrial average <.DJI> was up 79.80 points, or 1.02 percent, at 7,869.36. The Standard & Poor's 500 Index <.SPX> was up 10.76 points, or 1.32 percent, at 826.31. The Nasdaq Composite Index <.IXIC> was up 29.24 points, or 1.87 percent, at 1,590.85.

(Reporting by Ellis Mnyandu)

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