Wall Street jumps in 'schizophrenic' rebound fuelled by oil

By Noel Randewich

(Reuters) - Wall Street rebounded sharply on Tuesday, driven by a surge in oil prices and strong results from multinational 3M, Johnson & Johnson and Procter & Gamble.

The Dow rose 1.55 percent, while the S&P 500 was up 1.14 percent. All 10 major S&P sectors were higher, led by a 2.9-percent rise in the energy sector <.SPNY>. Crude prices settled up 3.7 percent on hopes that OPEC and non-OPEC producers would tackle an unrelenting supply glut. [O/R]

Investors have been reeling from a turbulent start to the year that has left the S&P down 7 percent from the end of 2015.

 

"This is a schizophrenic market. Big up days, big down days. No real direction," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.

Laser-focused on Tuesday's rebound in crude prices, Wall Street shrugged off a 6 percent slump in Chinese shares, sparked by jitters over Beijing's ability to calm domestic markets.

That left the gap between U.S. and Chinese stock indexes at its widest since at least August.

Shares of Apple , which is scheduled to report results after the close, were up 0.6 percent. The iPhone maker's comments on its China business will be in focus because of wide concerns about a potential slowdown in demand.

At 2:48 pm, the Dow Jones industrial average <.DJI> was up 245.95 points to 16,131.17 and the S&P 500 <.SPX> gained 21.43 points to 1,898.51.

The Nasdaq Composite <.IXIC> added 0.89 percent to 4,558.63.

While the U.S. Federal Reserve is not expected to move on interest rates at its two-day meeting, which began on Tuesday, investors will parse the Fed's commentary to gauge how recent global turmoil affects the central bank's outlook.

Johnson & Johnson was the biggest influence on the S&P, up 4 percent, while Procter & Gamble rose 2.78 percent. Both companies reported profits that beat estimates.

Exxon climbed 2.65 percent, while Chevron rose 3.1 percent.

3M jumped 5.3 percent, giving the biggest boost to the Dow, after better-than-expected quarterly profit.

Despite those results, profit expectations for the quarter are weak, with earnings at S&P 500 companies on average expected to fall 4.9 percent, according to Thomson Reuters data.

Advancing issues outnumbered decliners on the NYSE by 2,493 to 578. On the Nasdaq, 2,043 issues rose and 735 fell.

The S&P 500 index showed three new 52-week highs and seven new lows, while the Nasdaq recorded six new highs and 65 lows.

(Additional reporting by Abhiram Nandakumar in Bengaluru; Editing by Nick Zieminski)