NEW YORK (TheStreet) -- Last week's wild and volatile trading seemed behind Wall Street on Thursday as stocks settled at session highs. Benchmark indexes haven't moved far from their levels at the market open, buoyed by a rebound in crude oil prices.
The Volatility S&P 500 (VIX) , a gauge of market fear, was down 5.7% to 17.27.
West Texas Intermediate crude climbed 4.4% to $50.60 a barrel. Helping to boost prices, the European Union increased forecasts for growth to 1.7% this year from a previous estimate of 1.5%. Oil has been floundering in the face of global oversupply and weakening demand in key regions including China and the eurozone.
The S&P 500 added 0.8%, the Dow Jones Industrial Average was up 1%, and the Nasdaq gained 0.76%.
Royal Dutch Shell (RDS.A) , Chevron(CVX) - Get Report , BP(BP) - Get Report , and ConocoPhillips(COP) - Get Report were all higher, while the Energy Select Sector SPDR ETF (XLE) - Get Report jumped 1.3%.
"The surge in the oil stocks is partly based on the bounce back in crude and partially based on the realization that a lot of these energy companies earn money regardless of whether oil goes up or down in value," said U.S. Bank Wealth Management's David Heidel in a call.
Pfizer (PFE) - Get Reportsaid it was buying Hospira (HSP) for $15.23 billion in the largest health care deal so far this year. The deal is expected to close in the second half of the year. Pfizer shares were up 3.1% and Hospira shares rocketed 35.2% higher.
Allergan(AGN) - Get Report was up more than 2% after quarterly profit of $2.17 a share beat estimates by 34 cents. Sanofi(SNY) - Get Report spiked 3.1% after fourth-quarter income jumped 26% from a year earlier. Johnson & Johnson(JNJ) - Get Report and Bristol-Myers Squibb(BMY) - Get Report were also higher, while the Health Care SPDR ETF (XLV) - Get Report added 1.6%.
Weekly jobless claims that were lower than expected boded well for the narrative of an improving labor market ahead of Friday's U.S. jobs report for January. Initial jobless claims increased 11,000 to 278,000 in the week ended Jan. 31. Economists had expected 290,000 new claims for unemployment benefits. The less-volatile four-week moving average decreased 6,500 to 292,750.
The trade deficit widened to $46.6 billion in December, its largest deficit since 2012. Economists had expected the deficit to narrow to $38 billion from $39.8 billion a month earlier. The latest data could prompt a negative revision to fourth-quarter GDP. The government said in its initial estimate that the U.S. economy expanded at a 2.6% rate over the quarter.
"This jump in the deficit is nothing to be overly alarmed about since, rather than a reflection of the stronger dollar, it is mostly due to the volatility of energy imports and exports," said Paul Ashworth, chief U.S. economist at Capital Economics. "Both the price and volume of energy imports will fall sharply in January and we would expect the monthly deficit to be back below $40 billion per month soon."
Optimism is high the U.S. can deliver another solid jobs report on Friday morning. Official U.S. nonfarm payrolls data is expected to show an increase of 230,000 jobs, while the unemployment rate is forecast to remain unchanged at 5.6%.
Sprint(S) - Get Report shares were 6.4% higher after reporting that its subscriber losses had decelerated thanks to turnaround efforts. Quarterly losses of $2.4 billion, or 60 cents a share, came in wider than expected. GrubHub(GRUB) - Get Report surged 6.7% as earnings of 13 cents a share beat earnings estimates by 2 cents. Revenue jumped nearly 50% to $73.3 million.
21st Century Fox(FOXA) - Get Report reported better-than-expected quarterly results, but cut full-year earnings guidance due to currency pressures and weak performance at its Fox broadcast network. Shares tumbled 5.5%. Keurig Green Mountain (GMCR) shares were lower after sales disappointed in its first quarter. The coffeemaker company said sales of its 2.0 launch got off to a slower start than planned. The stock was down more than 4%.
Frontier Communications(FTR) - Get Report was up 5% on reports it is close to buying Verizon's(VZ) - Get Report wireless spectrum in a deal worth $10 billion, according to The Wall Street Journal. Michael Kors (KORS) shares fell nearly 3% after guiding for below-consensus sales for its current quarter. The luxury goods retailer expects revenue between $1.05 billion and $1.08 billion, below the $1.15 billion analysts had expected.
Cloud-computing software developer E2open (EOPN) surged nearly 40% on news it will be acquired by private-equity, venture capital firm Insight Venture Partners for $273 million, or $8.60 a share. The deal is a 41% premium to E2open's Wednesday close.
--Written by Keris Alison Lahiff in New York.