Stocks closed higher after another volatile day as gains in technology stocks and a huge drop in oil prices boosted the major averages.
Treasury prices rose, sending yields lower. The dollar was higher against the euro and the pound.
The Dow Jones Industrial Average rebounded after being loweron weakness in the energy sector. The Nasdaq finished up strongly and the S&P 500 was higher.
New Yorklight crude prices plunged nearly $3 on concerns that warm weather is affecting demand.
The drop accelerated after the government said supplies of gasoline and distillates rose more than expected last week. A rally in technology stocks helped to offset weakness in energy shares.
"We're looking to see if crude holds at $55," said Fimat Senior Vice President John Kilduff, adding that oil could move higher if it holds at that level. "If it cracks $55, look out below."
Intel boosted the Nasdaq in a week of positive news for the chipmaker. Intel was viewed as the beneficiary of a downgrade on Wednesday of rival Advanced Micro Devices and Banc of America today predicted Intel's fourth-quarter sales would come in at the high end.
Some market analysts said Wednesday's release of minutes from the Federal Reserve's December meeting, where policymakers expressed concern both about inflation and a slowing economy, were still weighing on stocks.
"One catalyst in the selloff earlier in the session was the psychological impact that we were still disappointed by the Fed minutes," said Art Hogan, managing director at Jefferies. "I don't think this selling pressure had any follow through and there were just more good stories than bad."
Hogan says Friday's wild card will be the December unemployment report. He says the markets will want to see a robust increase in payrolls after the unsettling comments from the Fed.
Piper Jaffray analyst Gene Munster says he expects Apple to announce the release of a wireless streaming media device, known internally as the iTV, at Macworld on January 9th. The device is expected to allow users to connect their televisions to media content on their computers.
Bear Stearns reacted positively to an announcement by eBay that it will raise some of its listing and sales fees.
Shares of biotech companies also helped lift the Nasdaq. Amgen was upgraded to an outperform by Bear Stearns.
Genzyme rose after favorable comments from analysts at Robert W. Baird, Citigroup and A.G. Edwards.
Retailers turned positive late in the session, benefiting from a drop in oil, despite generally disappointing same-store sales in December.
Wal-Mart Stores rose after it reported a better-than-expected 1.6% rise in December same-stores sales earlier this week. The world's largest retailer also forecast sales in January to rise between 1 to 2%.
Target said Thursday its December same-store sales rose 4.1%, less than the 4.5% that was expected.
Costco Wholesale reported a 9% rise in sales at stores open at least a year last month, higher than expectations.
Energy was among the worst performing sectors due to the drop in crude oil. Shares of big oil fell across the board with declines in Exxon Mobil , BP , Chevron and ConocoPhillips.
Europe Finishes Lower
European stock markets sank further into the red Thursday as weakness in commodities prices hit mining and energy stocks.
In London, the FTSE 100 declined as miners struggled for the second straight day.
Automakers were in focus in Germany, where the DAX also fell. DaimlerChrsyler was lower after officially being overtaken by Toyota Motor in terms of sales.
And the CAC-40 followed the trend lower.
Tokyo Rises on Yen
Japan's Nikkei 225 Average started 2007 by hitting an eight-month high. Toyota Motor drove the index higher as the auto stock surged to a record high after securing its position as one of the "Big Three" automakers in 2006.
South Korea's Kospi Index closed lower as program selling and profit-taking set in. A slump in commodity prices pushed Australia's S&P/ASX 200 down sharply.
Singapore's Straits Times Index set an all-time intraday high before pulling back as investors cashed in on recent gains in financial and property stocks. Hong Kong shares fell nearly 2% after setting record highs in each of the past five sessions.