I'm not sure that "schizophrenic" is quite the right word or if it's more accurate to say that it's the same irrational exuberance (or panic) that has plagued the market for some time now.  It is evident that whatever happened yesterday to cause the market to plunge 208 points happened almost exactly the same today but in reverse, causing an amazing 282 point jump.  As they said yesterday - it was all about oil.  Today too -- all about oil.  Today's exuberance was indeed irrational since the Chinese markets plunged big time again overnight, which should have sent our markets reeling.  Instead, investors decided to shrug off the six percent China slump and instead focus on all the positive things happening right here in the U.S.  Q4 reports have started coming in strong with 3M, J&J, and P&G all landing unexpected KO's.  Crude rose 3.7% on news that the Arab nations might start cooperating on reducing production thereby helping to tame the global supply glut.  Q4 expectations remain low with profit forecasts down 4.9%, all of which will likely change in a positive direction day by day as more companies like J&J exceed estimates.  Today's volume was the same as yesterday's with 7.9 billion shares traded.

Markets | Tue Jan 26, 2016 5:50pm EST

Oil fuels 'schizophrenic' rebound on Wall Street

BY NOEL RANDEWICH

DJ:  16,167.23  +282.01     NAS: 4,567.67  +49.18        S&P: 1,903.63  +26.55

(Reuters)  Wall Street rebounded over 1 percent on Tuesday, driven by a surge in oil prices and strong quarterly results from 3M, Johnson & Johnson and Procter & Gamble.  All 10 major S&P sectors ended higher, led by a 3.78-percent rise in the energy sector .SPNY. Crude prices settled up 3.7 percent on hopes that OPEC and non-OPEC producers would tackle an unrelenting supply glut.

With oil at 12-year lows and threatening to put higher-cost producers out of business, investors have been reeling from a turbulent start to the year that has left the S&P down 7 percent from the end of 2015.

"This is a schizophrenic market. Big up days, big down days. No real direction," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York. "We need some stability in oil prices for the markets to calm down from here and become less volatile."

Laser-focused on Tuesday's rebound in crude prices, Wall Street shrugged off a 6 percent slump overnight in Chinese shares, sparked by jitters over Beijing's ability to calm domestic markets.  That left the gap between U.S. and Chinese stock indexes at its widest since at least August.

The Dow Jones industrial average .DJI ended 1.78 percent higher at 16,167.23 points and the S&P 500 .SPX gained 1.41 percent to 1,903.63.  The Nasdaq Composite .IXIC added 1.09 percent to 4,567.67.

While the U.S. Federal Reserve is not expected to move on interest rates at its two-day meeting, which began on Tuesday, investors will parse the Fed's commentary to gauge how recent global turmoil affects the likelihood of future rate hikes.

Johnson & Johnson (JNJ.N) was the biggest influence on the S&P, up 4.96 percent, while Procter & Gamble (PG.N) rose 2.55 percent. Both companies reported profits that beat estimates.

Exxon (XOM.N) climbed 3.68 percent, while Chevron (CVX.N) rose 3.99 percent.

3M (MMM.N) jumped 5.24 percent, giving the biggest boost to the Dow, after better-than-expected quarterly profit.

Overall profit expectations remain weak, largely because of oil. Earnings of S&P 500 companies on average are expected to fall 4.9 percent, according to Thomson Reuters data. Excluding energy, earnings are expected to grow 1.1 percent.

About 7.9 billion shares changed hands on U.S. exchanges, below the 8.2 billion daily average for the past 20 trading days, according to Thomson Reuters data.

Advancing issues outnumbered decliners on the NYSE by 2,591 to 507. On the Nasdaq, 2,010 issues rose and 809 fell.

The S&P 500 index showed three new 52-week highs and seven new lows, while the Nasdaq recorded eight new highs and 75 lows.