Dow closes up 183 points as oil surges 8% to above $32 a barrel

Stocks surged in late afternoon trading Wednesday as the Dow shook off earlier losses and closed 183 points higher amid a rebound rally in oil.

The Dow Jones industrial average was up 1.1% to 16,336.66, after swinging between triple digit gains and losses throughout the trading day. The Standard & Poor's 500 gained  9.50 points, or 0.5%, to 1912.53. Tech stocks lagged though as the Nasdaq composite index fell 12.71 points, or 0.3%, to 4504.24.

A sharp jump in oil prices helped bolster stocks. Benchmark U.S. crude jumped 8% to $32.28 a barrel after falling 11.5% the previous two days.

Stocks got some juice from a number of factors, ranging from some market-friendly statements from Federal Reserve Bank of New York CEO William Dudley, a much-needed weakening of the U.S. dollar which helped commodities and U.S. multinational shares as well as a rebound in oil prices.

According to Gary Kaltbaum, president of Kaltbaum Capital Management, investors seized on comments from Dudley that hint at a less aggressive pace of interest rate hikes from the Federal Reserve this year.

“Dudley, said the magic words: "One thing I think we can say with more confidence is that financial conditions are considerably tighter than they were at the time of the December meeting, So if those financial conditions were to remain in place by the time we get to the March meeting, we would have to take that into consideration in terms of that monetary policy decision."

Dudley also said that continued strength in the dollar could have "significant consequences" for the U.S. economy. The dollar weakened after those comments.

Also helping stocks was a rebound in bond yields after the 10-year Treasury note briefly dipped to a one-year low of 1.79%, “which helped the beaten down financials,” says Mark Arbeter, president of Arbeter Investments. “With the recent decline in interest rates, there was worry over the flattening yield curve, which has led to weakness in banks here and abroad. The reversal in rates helped alleviate that a bit today.”

Earlier in the trading session bank stocks like Bank of America, Wells Fargo and Citigroup hit fresh 52-week lows before mounting a sizable rally into the close.

Two economic reports painted a mixed picture of the U.S. economy. Before the opening bell, payroll processer ADP reported that private employers created 205,000 jobs in January, topping forecasts and signaling that the more important government January jobs report set for release Friday will see solid gains as well.

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A separate economic report found that growth in the service sector slowed for a third straight month and hit its lowest point since February 2014. The Institute for Supply Management said Wednesday that its non-manufacturing index fell to 53.5% in January, down from 55.3% in December.

Overseas, Asian markets fell. Japan’s Nikkei 225 index plunged 3.2% to finish at 17,191.25 while Hong Kong’s Hang Seng index dropped 2.3% to 18,991.59. The Shanghai composite index fell 0.4% to close at 2739.25.

European shares were lower as Germany’s DAX index lost 1.5% while Britain’s FTSE 100 was down 1.4%.