Stocks Claw Way Higher

The S&P 500 and the Nasdaq also finished into the black. The S&P 500 gained 22.69 points, or 1.68%, to 1378.50, and the Nasdaq advanced by 40.68 points, or 1.74%, to 2389.86.

Elsewhere on the economic docket, the Census Bureau said that construction spending fell a greater-than-expected 1.1% in December. Also, the University of Michigan consumer confidence index rose to a reading to 78.4 in January from 75.5 in December.

Several other earnings releases were in focus, with two oil titans reports ahead of the opening bell. Dow component Exxon Mobil (XOM Quote) posted a record annual profit of $40.6 billion, while Chevron (CVX Quote) also reported a sharp increase in earnings to beat the Thomson First Call consensus. Both were trading higher in the premarket session.

Still, Exxon was lower by 45 cents, or 0.5%, at $85.95. Chevron was off 76 cents, or 0.9%, at $82.49.

In other M&A news, Alcoa (AA Quote) and Aluminum Corp. of China said they have acquired a 12% stake in Rio Tinto (RTP Quote), setting up a showdown with Rio suitor BHP Billiton (BHP Quote). Rio Tinto jumped 8.4%. Both Alcoa and BHP Billiton also ended up on the day.

Commodity prices were sinking. Crude oil fell $2.79 to end at $88.96 a barrel, and gold futures slid $14.50 to close at $913.50 an ounce.

Overseas markets were mostly higher. Hong Kong's Hang Seng jumped 2.9%, while Japan's Nikkei 225 slid 0.7%. Among European bourses, the Paris CAC 40, London's FTSE 100 and Germany's Xetra Dax were all higher by at least 1.5%.