Stocks maintained highs in a rally on Friday afternoon as crude oil spiked and banks recovered after steep declines a day earlier.

The S&P 500 was up 1.5%, the Dow Jones Industrial Average gained 1.3%, and the Nasdaq climbed 1.3%.

Crude oil bounced back from 13-year lows on Friday after the United Arab Emirates energy minister said the Organization of the Petroleum Exporting Countries was open to cutting output. Prices have recently been in a tailspin on concern over a supply glut and the inability of some of the largest oil-producing countries to address it. West Texas Intermediate crude oil added 12.3% to $29.44 a barrel on Friday after closing at its lowest level since May 2003 a day earlier.

This isn't the first time talk of production cuts in the Middle East have boosted prices in the past few weeks. 

"The market has had some practice regarding this kind of exercise in recent weeks, with prior rallies off Russian comments and the Venezuelan tour generating prior recovery attempts, helping to train the market to be both skeptical regarding the prospects for actual cuts and, if anything, more aggressive in trading on the headlines anyway," said Timothy Evans, energy futures specialist at Citi.

Energy shares were sharply higher with gains enjoyed among PetroChina (PTR - Get Report) , Chevron (CVX - Get Report) , Royal Dutch Shell (RDS.A - Get Report) , Total (TOT - Get Report)  and BP (BP - Get Report) . The Energy Select Sector SPDR (XLE - Get Report) climbed 2.1%.

Gold fell back from massive gains achieved a day earlier. Safe-haven assets had jumped on Thursday as investors fled riskier equities markets with gold climbing by its most in a year. Gold was down 0.7% to $1,238.60 an ounce, down for only its second time in 11 days.

Banks led markets higher on Friday after a heavy hit a day earlier. JPMorgan (JPM - Get Report) led the Dow after CEO Jamie Dimon disclosed a purchase of 500,000 shares, worth more than $25 million. Deutsche Bank (DB - Get Report) was also sharply higher after agreeing to buy back more than $5 billion in senior debt.

Peer financials stocks such as Citigroup (C - Get Report) , Goldman Sachs (GS - Get Report) , HSBC (HSBC) , Bank of America (BAC - Get Report) and Wells Fargo (WFC - Get Report) also jumped, while the Financial Select Sector SPDR (XLF - Get Report) added 3.5%.

Bank of America and Wells Fargo are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio.

Exclusive Look Inside:

You see Jim Cramer on TV. Now, see where he invests his money and why Bank of America is a core holding of his multi-million dollar portfolio.

Want to be alerted before Jim Cramer buys or sells BAC? Learn more now.

U.S. stocks spent the majority of Thursday with losses of more than 1% as investors grew skeptical that global central banks could rein in rampant volatility and soothe financial markets. The Dow fell 1.6%, or 255 points, bouncing from a 400-point loss earlier in the session.

U.S. retail sales climbed 0.2% in January, while core sales, excluding auto and gas, rose 0.6%. Lower gas prices were a major pressure on sales last month. December's retail sales were revised up to 0.2% growth from negative 0.1%.

"A stronger-than-expected improvement in retail spending at the start of the year, coupled with a sizable upward revision to purchases at the end of last year suggests household spending is on relatively firmer footing than previously thought," said Lindsey Piegza, chief economist at Stifel. "While still hardly robust and clearly losing momentum compared to last year, from the [Federal Reserve's] perspective, any further evidence of the U.S. economy weathering the market turmoil at the start of the year is confirmation the Committee should continue to focus on the longer-run and ignore short-term disruptions."

Import prices fell in January for the seventh month in a row as commodities continued to fall and a strong dollar ate into revenue. Prices fell 1.1%, though economists had expected a steeper 1.4% decline. 

Jack Dorsey's Square (SQ - Get Report) jumped after Visa (V - Get Report) disclosed a new stake of nearly 10%. The new position makes Visa the second-largest shareholder in Square. Visa had recently been developing its own near-field payment technology.

AIG (AIG - Get Report) , the insurer that Carl Icahn wants to break up, agreed to give board seats to one of his representatives as well as activist investor John Paulson. The company said it would nominate Paulson and Samuel Merksamer, a managing director of Icahn Capital, for election at this year's annual shareholder meeting. The insurance company also reported a wider-than-expected quarterly loss and raised its dividend by 14%.

Pandora Media (P) shares were active on reports of deal talks. The music streaming company has reportedly held meetings with potential buyers, though negotiations are still preliminary.Pandora is working with Morgan Stanley to meet with potential buyers, according to sources. Gains were capped, though, after Pandora swung to a quarterly loss.

Groupon (GRPN - Get Report) jumped more than 20% after beating analysts' estimates on its top- and bottom-lines. The deals site reported adjusted earnings of 4 cents a share, above expectations for a break-even quarter. Revenue climbed 3.8% to $917.2 million, above forecasts of $846 million.