A recovery in crude oil prices helped put stocks into rebound mode a day after the market had its worst drop since September. Investors also welcomed some encouraging company earnings.
Chevron and Exxon Mobil each jumped about 5 percent, by far the biggest gains in the Dow Jones industrial average. It was a reprieve for the energy sector, which has been battered in recent months as crude oil prices plunged. U.S. crude oil rose 2.4 percent on Thursday.
“That all led to a little bit of confidence in the markets and some buyers coming in,” said Sean Lynch, co-head of global equity for Wells Fargo Investment Institute. “It’s been pretty ugly so far, year-to-date, and it’s good to see the gains, but we’ll see if they follow through [Friday].”
The Dow rose 227.64 points, or 1.4 percent, to 16,379.05. The average had risen as much as 330 points earlier. The Standard & Poor’s 500 index gained 31.56 points, or 1.7 percent, to 1,921.84. The Nasdaq composite added 88.94 points, or 2 percent, to 4,615.
It was the best gain for each index since Dec. 4.
Even with the big rebound day the three major U.S. stock indexes remain down for the year. The Dow and S&P 500 are both off about 6 percent, while the Nasdaq is down nearly 8 percent.
It’s been a rocky start to the year for stocks, reflecting investor worries about the slowdown in China, plunging oil prices and the implications those trends may have for U.S. corporations. The first eight trading days of 2016 represent the worst start to a year in the history of both the S&P 500 and the Dow.
That slump worsened on Wednesday, pushing the S&P 500 index into what’s known as a correction, or a drop of 10 percent or more from a peak.
On Thursday, after wavering in the first hour of trading, the market shifted higher and remained on an upward track the rest of the day.
Investors welcomed a pickup in the price of crude oil, which had briefly fallen below $30 a barrel for the first time since late 2003 the day before. It ended up rising 72 cents, or 2.4 percent, to close at $31.20 a barrel in New York. Brent crude, a benchmark for international oils, also gained 72 cents, or 2.4 percent, to $31.03 a barrel in London.
The rise in crude oil led traders to pile into several big-name energy companies. Exxon Mobil added $3.47, or 4.6 percent, to $79.12, while Chevron rose $4.14, or 5.1 percent, to $85.47.
“The markets in general needed a little dose of confidence and they got it through a firming of oil prices,” Lynch said.
Energy company Williams Cos. vaulted 34.4 percent, to lead all the gainers in the S&P 500. The stock, which had fallen sharply a day earlier, rose $4.68 to $18.29. It’s still down 29 percent for the year. Freeport-McMoRan also got a boost. The mining company rose 46 cents, or 12.3 percent, to $4.20.
All told, the S&P 500’s energy stocks jumped 4.5 percent. The sector remains down 6.1 percent for the year.
The start of the latest corporate earnings season also helped lift the market Thursday.
JPMorgan Chase rose 1.5 percent after the bank reported earnings that were better than analysts expected. The stock added 86 cents to $58.20.