The S&P 500 and the Nasdaq rallied nearly 2 percent on Friday morning as a cold wave in the United States and Europe helped crude oil surge for a second day.
All 10 major S&P sectors were in the black, led by a 4.67 percent jump in energy stocks. The Nasdaq soared more than 2 percent and was on track for its best day since Oct. 23.
European Central Bank President Mario Draghi's comments on Thursday suggesting that the bank could ease its monetary policy at its March meeting also encouraged investors bruised by a brutal selloff that began at the start of 2016.
Crude prices, still under pressure from a global glut, were up more than 6 percent as the cold wave boosted short-term demand and traders cashed in their short positions.
The U.S. stock market, tracking oil prices, has failed to sustain any rallies this year as risk-averse investors search for signs of stability.
The S&P 500 is down 8.6 percent in 2016, having closed higher on only six of the 13 sessions.
"I do think that even just to get a couple of days here with neutral, rather than downward, movement is going to be a positive because it's going to settle some fears," said Paul Springmeyer, senior portfolio manager at the private client reserve at U.S. Bank in Minneapolis.
"Long term, the stability of the U.S. economy is really what's at play here and all signs, with low inflation and low oil prices, are pointing to an ability to move forward and move higher," Springmeyer added.
However, concerns about a crude glut and a tepid demand outlook beyond the winter remain. Rating agency Moody's put 120 energy firms across the world on review for downgrades.
At 10:49 a.m. ET (1549 GMT), the Dow Jones industrial average was up 178.23 points, or 1.12 percent, at 16,060.91, the S&P 500 was up 30.03 points, or 1.61 percent, at 1,899.02 and the Nasdaq Composite index was up 93.97 points, or 2.1 percent, at 4,566.03.
Apple was up 3.7 percent at $99.84 and gave the biggest boost to the S&P 500 and the Nasdaq.
U.S. economic data on Friday showed existing home sales soared nearly 15 percent in December, handily beating estimates and recovering from a 10.5 percent fall in November.
Fourth-quarter earnings reports are likely to offer little cheer, with S&P 500 companies on average expected to post a 4.5 percent decline in profit, according to Thomson Reuters data.
Shares of General Electric were down 2.1 percent at $28 after the company's quarterly revenue missed analysts' estimates.
American Express was down 9.6 percent at $56.62 after the company issued disappointing earnings forecasts.
Schlumberger was up 6.3 percent at $65.26 after the world's biggest oilfield services company reported better-than-expected profit and set a $10 billion buyback program.
Advancing issues outnumbered decliners on the NYSE by 2,786 to 228. On the Nasdaq, 2,204 issues rose and 435 fell.
The S&P 500 index showed two new 52-week highs and seven new lows, while the Nasdaq recorded five new highs and 27 new lows.
(Reporting by Abhiram Nandakumar in Bengaluru; Editing by Saumyadeb Chakrabarty)
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Updated Date: Jan 23, 2016 00:00 AM