Stocks climbed to near the highs of the day ahead of the close as investors stepped back into the market to send it broadly higher after all the major indices fell to their lows for the year on Wednesday.
The Dow Jones Industrial Average gained more than 170 points after falling 242 points on Wednesday as traders whipsawed the blue-chip index with every news development in Japan's nuclear crisis.
Among Dow components, Hewlett-Packard , Chevron and Pfizer gained, while Kraft fell.
The S&P 500 and the Nasdaq also advanced after wiping out all gains for the year as of Wednesday's close.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, sank more than 9 percent to below 27. On Wednesday, the VIX skyrocketed more than 20 percent to above 29, as investors tried to gauge the implications of the crisis at the Fukushima Daiichi power plant in Japan.
All key S&P 500 sectors rose, led by energy, telecom and materials.
"Clearly the sell off we’ve had through the early part of this week was more of an emotional selloff," said Randy Frederick, director of trading and derivatives for Charles Schwab. "I still think in the long-term there’s reason to be optimistic."
The market dive this week is where the "experienced investors get separated from the ones who aren't," Frederick said, as experienced investors knew there was no fundamental reason for the sharp decline. It was "one of the best buying opportunities we've had in some time," he said.
The spike in the VIX, a measure of the market's uncertainty, is a temporary reaction to unfolding news event, and is likely to settle somewhere between 18 and 20, he added. Unless events in Japan turn even worse, "I can’t see it being up there for long," Frederick said.
Despite the market's rise, Scott Redler, chief strategic officer at t3live.com, said the "market still lacks a punch and potency," noting that stocks only regained a small portion of what they've lost in the last week or so.