Wall Street said goodbye to the day's losses by late afternoon in a session which was, predictably, governed by oil.
The day's trading was in tight lockstep with commodity markets just as stocks have been all week. Benchmark indexes began the day sharply lower, in line with a roughly 3% drop in crude, before grinding back to the flatline once oil moved back into positive territory.
The S&P 500 was up 0.44%, recovering from an earlier decline of more than 1%. The Dow Jones Industrial Average added 0.32%, and the Nasdaq climbed 0.9%.
Oil reclaimed a level above $32 after the Energy Information Administration said crude inventories grew by 3.5 million barrels in the past week, a smaller increase than feared. That was lower than a separate measure from the American Petroleum Institute, which showed a rise of 7.1 million barrels in the same period. West Texas Intermediate crude closed 0.9% higher at $32.15 a barrel on Wednesday.
Oil had slumped more than 3% earlier in the day as hopes faded that members of the Organization of Petroleum Exporting Countries would come to an agreement on production. In a speech earlier Tuesday, Saudi Arabian Oil Minister Ali Al-Naimi dismissed the possibility of production cuts, instead arguing that by maintaining output, the market will rebalance over time as demand improves. Negotiations over a production freeze started last week as oil producers grapple with a global surplus.
"Oil continues to impact investor sentiment and broad market returns," said Terry Sandven, chief equity strategist at U.S. Bank. "Continued supply/imbalance, implications of Iran increasing production and adding to global supplies, potential production agreement between key players (such as Saudi Arabia and Russia) are among factors adding to equity volatility and uncertainty."
The housing sector cooled in January, with new home sales tumbling 9.2% to a seasonally-adjusted 494,000, the Commerce Department said. That was the lowest level since October and missed estimates of 520,000. Demand for housing remained strong, though, with existing home sales reaching a six-month high, according to data released a day earlier.
"With the threat of rising rates, ample uncertainty, and moderate income growth, the housing market still appears to be the silver lining of the U.S. recovery," said Lindsey Piegza, chief economist at Stifel.
Federal Reserve chatter also kept traders on their toes on Wednesday. Fed Vice Chairman Stanley Fischer reiterated that members "do not know" what the exact rate hike plan looks like, emphasizing a continued focus on incoming data in a speech on Tuesday night.
Fischer also commented on recent market volatility. "We have seen similar periods of volatility in recent years -- including in the second half of 2011 -- that have left little visible imprint on the economy, and it is still early to judge the ramifications of the increased market volatility of the first seven weeks of 2016," he noted.
Meanwhile, two other Fed members came in on the hawkish side. Richmond Fed President Jeffrey Lacker suggested he could back another interest rate hike when the central bank meets in less than a month as rates at current levels cannot adequately fight against deflation.
In a separate speech a day earlier, Kansas City Fed President Esther George said that a rate increase was still in play at the central bank's meeting in March, arguing that inflation was moving toward the Fed's 2% target.
In earnings news, Etsy (ETSY) - Get Report added more than 6% after beating analysts' estimates in its recent quarter. The online crafts store also said it expects sales growth of 20% to 25% over the next three years. Fourth-quarter sales jumped 35% on strong demand during the holiday-shopping season.
First Solar (FSLR) - Get Report surged 12% after a better-than-expected fourth quarter. However, the solar company did reduce its 2016 sales guidance, noting that it was pushing a number of projects to next year.
Target (TGT) - Get Report , a holding in Jim Cramer's Action Alerts PLUS charitable trust portfolio, climbed 4% after showcasing strong online sales growth in its recent quarter. The retailer reported a 1.9% increase in comparable-store sales, more than half of which were attributed to e-commerce.
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DreamWorks Animation (DWA) jumped 22% after posting a 36% increase in revenue. The movie studio benefited from better-than-expected results in its feature film segment, led by animated film How to Train Your Dragon 2. Adjusted earnings of 55 cents a share rocketed past estimates of 16 cents.
Lowe's (LOW) - Get Report slid 1.1% after a disappointing quarter that was a stark contrast to competitor Home Depot's results a day earlier. Profit slumped to 1 cent a share, down from 46 cents a share a year ago. The home-improvement retailer cited a $530 million charge related to the exit from its joint venture in Australia as the main reason for the decline.
Chesapeake Energy (CHK) - Get Report bounced 23% after announcing even more cuts to capital spending in the face of weaker oil prices. The oil company reported a quarterly loss of $3.36 a share compared to profit of 81 cents a share a year earlier. Chesapeake plans to cut capital spending by 57% in 2016.