Also weighing on sentiment earlier was the overnight 6.4 percent plunge in the Shanghai composite, while the Hang Seng lost nearly 1.6 percent. In contrast, Japan's Nikkei 225 rose 1.4 percent.
"From a fundamental standpoint the market's in a wait and see mode and to a large extent remains at the mercy of oil," said Adam Sarhan, CEO of Sarhan Capital. "As goes oil, so goes the other risk assets."
Treasury yields held lower, with the 2-year yield at 0.71 percent and the 10-year yield at 1.70 percent.
The U.S. dollar index traded little changed, with the euro at $1.102 and the yen at 112.92 yen against the greenback.
European stocks pared gains to close but held about 2 percent higher. The STOXX Europe 600 Banks outperformed, briefly trading more than 4 percent higher but still more than 30 percent below its 52-week intraday high.
U.S. stock index futures held mostly higher after January orders for durable goods jumped 4.9 percent, topping expectations with the largest increase since March and reversing December's revised 4.6 percent plunge. Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, jumped 3.9 percent after tumbling by a revised 3.7 percent in December, Reuters said.
"Favorable technicals and incrementally positive news should lend to perhaps a higher trend today," BMO's Ablin said.
The major U.S. averages staged a massive reversal Wednesday to close higher as some stabilization in oil prices offset declines in financials.
St. Louis Fed President James Bullard, a voting member of the Fed, said on CNBC's "Squawk Box" that he's not too concerned about a global recession but he does see a "lower trend growth rate." He also attributed the recent market volatility to traders factoring in all at once policymakers' projections for four hikes in 2016.
Read MoreCiti: Risk of global recession rising
Separately, Bullard late Wednesday reiterated his opposition to further interest rate hikes given that U.S. inflation expectations have fallen and threaten the U.S. central bank's credibility.
Atlanta Fed President Dennis Lockhart reiterated Fed policy for rate hikes remains data dependent, according to StreetAccount.
San Francisco Fed President John Williams reiterated Thursday he expects the Fed to continue gradually raising interest rates. In a speech aimed at pushing back on political efforts to clamp down on Fed independence by imposing a Taylor-like rule on decisions, Williams said the central bank should avoid tying its policy-making to a single rule and continue to embrace an eclectic approach, according to Reuters.
On Wednesday, the Dow Jones industrial average reclaimed a 266-point drop — its largest recovery of losses by points since 2008 — and then went on to close up 53 points. The S&P 500 erased intraday losses of more than 1 percent for the third time in 2016 and closed up 0.4 percent.
Read More Early movers: BUD, DPZ, BBY, LB, RATE, HPQ & more
The Dow Jones industrial average closed up 212.30 points, or 1.29 percent, at 16,697.29, with United Technologies leading all constituents higher.
The Dow transports closed 1.08 percent higher, with Avis Budget leading advancers and JetBlue the greatest decliner.
The S&P 500 closed up 21.90 points, or 1.13 percent, at 1,951.70, with financials leading all 10 sectors higher.
The Nasdaq composite closed up 39.60 points, or 0.87 percent, at 4,582.20.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, held near 19.5.
About three stocks advanced for every decliner on the New York Stock Exchange, with an exchange volume of 951 million and a composite volume of 4.1 billion in the close.
Gold futures settled 30 cents lower at $1,238.80 an ounce.
—Reuters contributed to this report.
On tap this week:
Earnings: AB InBev, Bayer, Apache, Best Buy, Campbell Soup, Domino's Pizza, Kohl's, Chico's FAS, Sears Holdings, SeaWorld, Baidu, Autodesk, Gap, Intuit, Kraft Heinz, Herbalife, Live Nation Ent., Noodles & Co., Weight Watchers
G-20 finance ministers meet in Shanghai
G-20 meets in Shanghai
Earnings: J.C. Penney, Foot Locker, Sotheby's, Sempra Energy, AmericanTower, Centerpoint, Liberty Media, Telefonica, Rowan Cos
8:30 a.m. Real GDP Q4 (second reading); international trade
8:30 a.m.: Personal income, consumer spending
10 a.m. Consumer sentiment
Earnings: Berkshire Hathaway
*Planner subject to change.
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