Stocks posted solid gains in a quiet session Wednesday, helped by advances in health care and industrial companies.
Without any major economic reports to work with, trading was lighter than usual. Many investors remain on the sidelines before Thursday's release of minutes from the Federal Reserve Open Market Committee's latest policy meeting and the start of corporate earnings reports.
At the close on Wall Street, the Dow Jones industrial average rose 122.1 points, about 0.7 percent, to 16,912.3. The Standard & Poor's 500 index added nearly 16 points, about 0.8 percent, to 1,995.83 and the Nasdaq composite rose 42.8 points, about 0.9 percent, to 4,791.2. The Dow has risen for the past three days, while the S&P 500 for five days out of the past six.
OIL REBOUND: Oil prices gave up an early gain and turned lower after the Energy Department reported that U.S. oil inventories rose by 3.1 million barrels last week and that demand for oil fell slightly. Oil had rallied earlier on signs that producers were cutting back production.
As the markets closed, the price of U.S. benchmark crude oil was down 72 cents, about 1.5 percent, at $48.71 a barrel on the New York Mercantile Exchange. Brent Crude, which is used to price international oils, lost 59 cents, or 1.1 percent, to $51.33 a barrel in London.
ANTICIPATING EARNINGS: Events over the next two weeks are likely to determine the market's next move. Earnings reports for the third quarter will start Thursday when Alcoa, the giant maker of aluminum and other metals, will report its results.
Expectations for this round of earnings are low. Analysts expect third-quarter results to be down 5.1 percent from last year, according to FactSet, which would be the first back-to-back quarterly drop in earnings since 2009.
"Expectations are so low this quarter that it's not going to be hard for companies to beat," said Jack Ablin, chief investment officer at BMO Private Bank, overseeing $66 billion in assets.
GLOBAL DOWNTURN: Another concern lingering on investors' minds is whether the global economy is entering a downturn. Those fears were stoked by a report from the IMF that China's slowdown and tumbling commodity prices will push global economic growth this year to the lowest level since the 2009 recession.
With that in mind, companies, particularly those with exposure to businesses outside the United States are likely to be in focus this quarter, Ablin said. "We need to see how the impact of international trade and global growth is having on the multinationals here," he said.