NEW YORK (TheStreet) -- Stocks celebrated a second day of soaring gains on Thursday and while investor confidence was pinned on Federal Reserve rate speculation, some analysts believe the surge can also be traced to a simpler explanation: traders were buying the dips.

"Things were a little bit oversold," said Karyn Cavanaugh, senior market strategist at Voya Investment Management, in a call. "We had a pretty brutal couple of weeks around Christmas and New Year's that weren't really warranted based on the fundamentals."

Benchmark indexes built upon an earlier surge with increasing momentum throughout the day, ending just points from a session high. The S&P 500 gained 1.8%, the Dow Jones Industrial Average surged 323 points, and the Nasdaq climbed 1.8%.

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Prior to Wednesday, stocks had suffered a five-day losing streak, cratering alongside crashing oil prices. Over those five days, the S&P 500 fell more than 4% and the Dow dropped 3.8%. Over the past two days, however, stock markets have rallied around 3% and erased the losses suffered over the first few trading days of 2015.

"It's a combination," added Cavanaugh. "It was oversold and central banks are still going to be accommodative and that together has really given the market snapback."

Wall Street started the day off on the right foot with optimism high on confirmation the Federal Reserve won't rush to start raising rates any time soon despite a strengthening economy. The Fed minutes released Wednesday echoed the central bank's promise at its December meeting to be "patient" in determining when to raise interest rates and that a rate hike wouldn't likely come for the next couple of meetings.

"The Fed's latest minutes indicated that underlying strength in the U.S. should continue into the new year (perhaps motivating the S&P 500 to break away from its recent downward trajectory and finish the day up 1.2%)," Raymond James analysts wrote in a report.

Voting Fed member Charles Evans, president of the Chicago Federal Reserve Bank, reiterated the central bank's commitment to a conservative approach to rate hikes. "I don't think we should be in a hurry to raise rates," Evans said at a standalone conference on Wednesday.

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Investors are also looking toward Friday's employment report. Expectations are for 240,000 jobs to have been added to nonfarm payrolls in December, lower than November's blockbuster 321,000 though remaining above 200,000 for the 11th consecutive month.

"If we're north of 200,000, which it probably will be, we're going to have a good number," said U.S. Bank's Jeff Kravetz. "The momentum is there... the labor markets have gotten better, [and] I think companies feel less uncertainty about hiring people in general."

The price of crude oil appeared to somewhat stabilize at over $48 a barrel after plunging to fresh 5 ½-year lows earlier in the week. The commodity had been in freefall as global oil producers gave no signs they would limit production in the face of faltering demand. West Texas Intermediate crude was slightly higher at $48.80 a barrel.

All S&P 500 sectors were higher, though retailers were among the best individual performers. Aeropostale (ARO) soared 24.8% as the teen retailer reported higher margins over the holidays and guided for a narrower loss in the fourth quarter. Barnes & Noble (BKS) - Get Barnes & Noble, Inc. Report was up 5% as core comparable-bookstore sales jumped 1.7% over the holiday shopping season. The bookseller expects flat core comparable-store sales for the full year.

Urban Outfitters (URBN) - Get Urban Outfitters, Inc. Report reported a 4% jump in comparable-store sales over the holiday shopping season with total sales growth of 10% to $785 million. Shares climbed 3.7%. Costco (COST) - Get Costco Wholesale Corporation Reportedged 0.86% higher after reporting a 3% gain in same-store sales over December. Analysts had expected an increase of 2.8%. 

J.C. Penney (JCP) - Get J. C. Penney Company, Inc. Report announced plans to shut 40 of its stores by April, eliminating 2,250 jobs. A spokesperson of the retailer said the company would try to reassign positions at nearby stores. Shares were up 0.76% after rallying more than 20% on Wednesday.

In earnings news, Apollo Education Group (APOL) missed quarterly revenue estimates with enrollment at University of Phoenix down 13.5%. Total sales tumbled more than 15%. Shares were down 13.5%.

Global Payments (GPN) - Get Global Payments Inc. (GPN) Report surged 6.9% as second-quarter earnings beat forecasts and revenue jumped 10%. Constellation Brands (STZ) - Get Constellation Brands, Inc. Class A Report , producer of beer brands Corona and Modelo, was up 4.5% after reporting a 7% jump in revenue for the quarter. Earnings of $1.23 a share beat estimates by 9 cents.

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--Written by Keris Alison Lahiff in New York.