Stocks closed modestly higher on Thursday, cutting in half the losses made on Wednesday when a commodity rout roiled global markets.
The Dow Jones Industrial Average rose 65.89 points, or 0.5 percent, to close at 12,695.92, following a 1 percent decline in the previous session.
Cisco was the biggest laggard on the blue-chip index throughout the session after the tech bellwether warned that it would perform worse than analysts had expectedin the current quarter. Shares of the networking giant tumbled to the bottom of the S&P 500, and at least five brokerages cut their price targets on the firm.
TheS&P 500 rose 6.57 points, or 0.5 percent, to close at 1,348.65, while the tech-heavy Nasdaq rose 17.98 points, or 0.6 percent, to close at 2,863.04. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell to nearly 16.
Among key S&P 500 sectors, consumerstaples and health care gained, while financials fell.
It's difficult to read too much into the fact commodities and stocks have moved in the same direction the last two sessions, according to Jeremy Zirin, chief U.S. equity strategist at UBS Wealth Management.
"Commodities have a inconsistent relationship with stocks over time," Zirin said. "They move together if it’s demand driven, and if they rise too far too quickly, and (commodity prices) start to crimp demand, then you’ll see risk assets start to sell off."
When commodities and stocks do move together, it's usually out of a concern the economy is experiencing "demand destruction," meaning commodities like oil are in less demand, which can be a sign of a slowing economy. On Wednesday, the market learned industrial activity in China was slowing, and inventories of crude oil and gasoline supplies in the U.S. were growing, two signals of slowing economic demand.
But, Zirin added, the reason for Wednesday's fall in energy and oil prices could also be simply some of the froth coming out of those sectors.
Others viewed the slide in stocks on Wednesday as a "risk off" trade, said Yu-Dee Chang, chief trader and principal of ACE Investment Strategists.
But Chang, noted, the stock market wasn't as "emotional" as the rest of the "risk on" assets, as the U.S. market fell only about 1 percent amid much steeper losses among precious metals and oil.
The dollar , which rose on Wednesday, slumped slightly against a basket of currencies after a European Central Bank official said a 25 basis point boost in interest rates in April was "certainly not" a one-time occurrence, according to Reuters. His comments gave a modest boost to the euro.
Oil prices, which nose-dived Wednesday, stabilized with U.S. light, sweet crude rising 0.77 percent to settle at $98.97 a barrel and LondonBrent crude gaining 0.4 percent to settle at $112.98.
Energy stocks were also in focus as executives of the major oil companies, including Chevron, BP, Shell, ConocoPhillips and ExxonMobiltestified before a Senate committeeon a proposal to cut tax breaks for the industry.
Precious metals prices also reversed, shedding losses from early in the session. Silver gained 2 percent to settle at $34.79 an ounce, while gold gained 0.4 percent on Thursday to settle at $1,506.60.
Also on the earnings front, Symantec soared to the top of the S&P 500 after the computer security firm reported solid earnings. In addition, at least five brokerages raised their price targets for the company.
And Kohl's rose after the retailer raised its profit forecast for the year, and said its gross margins were intact despite rising commodity costs.
Kohl's results, combined with Macy's strong results earlier in the week, lifted retail shares. The S&P 500 Retail Index gained while shares of most department stores traded higher on Thursday, including JC Penney and Target .