Wall Street saw another day of big moves, but this time it was in investors' favor.
Markets climbed on Tuesday as a rebound in crude oil dictated market direction again.
The S&P 500 was up 1.3%, the Dow Jones Industrial Average added 1.6%, or 281 points, and the Nasdaq gained 1.2%. The S&P 500 remains in correction territory, though, having fallen 12% from its 52-week high.
Stocks have suffered from unpredictable and steep moves since the beginning of the year as worries over global growth and a relentless slide in commodities kept equities under pressure. Despite Tuesday's rally, we might not have reached the end to this selloff just yet.
"There's still ... concerns about growth and where we're headed," Robert Pavlik, chief market strategist at Boston Private Wealth, told CNBC. "People are concerned they don't know where energy prices are heading, they don't know what the [Federal Reserve] is going to be saying."
Crude oil endured more big swings as prices rebounded on Tuesday after a massive selloff a day earlier. West Texas Intermediate crude oil gained 3.7% to close at $31.45 a barrel. Prices have been under pressure on signs major oil producers such as Saudi Arabia will ramp up production despite massive global oversupply.
The energy sector was the best performer on markets. Major oilers including Exxon Mobil (XOM - Get Report) , ConocoPhillips (COP - Get Report) , Chevron (CVX - Get Report) , and Schlumberger (SLB - Get Report) jumped, while the Energy Select Sector SPDR ETF (XLE - Get Report) added 3.7%.
A rebound in crude oil could be short-lived, however, as the worries over global oversupply and weaker demand persist. A lower commodities environment is expected to have a big impact on earnings for energy-dependent companies during this earnings season.
"U.S. companies haven't been doing all that badly, but the energy sector's terrible results have helped take the entire market down," said Brad McMillan, Chief Investment Officer for Commonwealth Financial Network. "This decline is probably getting close to the end -- oil is not going to zero -- but it may still continue for several quarters."
The central bank was on investors' minds as members convened on Tuesday morning for a two-day Federal Open Market Committee meeting. While no change in policy is expected at this meeting, a statement to be released on Wednesday afternoon will be closely analyzed for clues as to the pace of future rate hikes.
"With global equity markets down substantially over the last several weeks, the U.S. dollar reaching new cyclical highs, and a clouded inflation outlook, the FOMC statement should strike a more cautious tone," Deutsche Bank analysts wrote in a note.
A number of earnings reports kept investors busy on Tuesday. Sprint (S - Get Report) boosted the S&P 500, jumping 19% after reporting a narrower-than-expected third-quarter loss and raising its full-year guidance. The company said revenue has stabilized and that postpaid phone net additions were the highest in three years.
3M (MMM - Get Report) added 5% after a mixed quarter. The adhesives company earned $1.80 a share in its fourth quarter, above analysts' estimates of $1.63 , while revenue of $7.3 billion topped forecasts for $7.2 billion.
Coach (COH) climbed nearly 10% after beating quarterly estimates on its bottom-line. The company said it expects full-year sales up in the low-single percentage digits, excluding currency effects.
Procter & Gamble (PG - Get Report) added 2.6% after increased pricing in its consumer-products division fueled constant-currency sales growth. Overall revenue fell 8.5% as a stronger U.S. dollar diminished overseas sales.
Just 18% of S&P 500 companies have reported earnings so far with heavy-hitters such as Microsoft (MSFT - Get Report) still to report this week. Of the companies that have reported, 70% have exceeded analysts' earnings estimates.
Apple (AAPL - Get Report) shares were active in after-hours trading after the company beat estimates on its bottom line in the first quarter. The tech giant earned $3.28 a share, a nickel above estimates. However, sales came in below estimates with revenue of $75.9 billion missing forecasts of $76.6 billion.
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Consumer confidence rose in January even as equity markets cratered. Sentiment rose to 98.1 from 96.3 in December, above estimates and its best reading since October, according to the Conference Board. A strong labor market and low gasoline prices appeared to have boosted confidence to start the new year.
"This buoyancy in U.S. household mood is somewhat surprising given the rising anxiety about U.S. and global growth prospects," said Millan Mulraine, deputy chief U.S. macro strategist at TD Securities. "At the very least, this report suggests that U.S. households remain quite upbeat about the economic prospects and given the importance of consumer spending to overall domestic activity, the resiliency in household sentiment will be interpreted by the Fed as good news."