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US stocks rose, with the Standard & Poor’s 500 Index recovering from a 21-month low as investors weighed the potential for additional stimulus measures amid uncertain prospects for global growth.

Chevron Corp. climbed 1.8 percent and Home Depot Inc. surged 4.2 percent as energy and consumer discretionary companies helped pace the rebound from yesterday’s selloff. Banks also bounced, with Wells Fargo & Co. and Citigroup Inc. up at least 1.3 percent. Verizon Communications Inc. gained 3 percent after its profit beat estimates.

The S&P 500 rallied 1.1 percent to 1,879.29 at 11:08 a.m. in New York, after falling 1.2 percent yesterday to the lowest since April 2014. The Dow Jones Industrial Average gained 197.92 points, or 1.3 percent, to 15,964.66, and the Nasdaq Composite Index added 1 percent. Trading in S&P 500 shares was 42 percent above the 30-average for this time of day.

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“The market is taking a good hard look at fundamentals in the U.S. and saying things aren’t actually that bad after all,” said Brad McMillan, chief investment officer of Commonwealth Financial Network in Waltham, Massachusetts, which oversees $100 billion. “A lot of people were selling yesterday out of fear but started to buy at the pullback, making people reassess if things are really that bad.”

European Central Bank President Mario Draghi said during a press conference today that downside risks to the euro-area economy have increased since the year began, and the central bank may need to bolster its stimulus programs as soon as March amid rising concerns about the recovery. The bank kept interest rates unchanged.

The European Central Bank president Mario Draghi.
The European Central Bank president Mario Draghi.Kai Pfaffenbach/REUTERS

Oil’s crash, amid a Chinese economic slowdown that’s throwing international markets into turmoil, has raised concern that record-low rates and a 1.5 trillion-euro ($1.6 trillion) bond-buying program may not be enough bring inflation back to just under 2 percent from current levels near zero.

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Global equities’ downward spiral at the start of the year got even worse as oil continued a plunge and a slowdown in China weighed on sentiment, wiping about $2.2 trillion off the value of U.S. stocks. Investors from Japan to Germany and Brazil have watched their stock markets tumble into bear territory. The S&P 500 has fallen 8.1 percent year to date, and is down about 12 percent from a record set in May.

Investment managers are warning that the benchmark, could drop another 10 percent and oil could fall as low as $20 a barrel. Jeffrey Rottinghaus, whose T. Rowe Price mutual fund beat 99 percent of rivals over the past year, also said the U.S. economy may slip into a mild recession.

“I think people are starting to believe that while we may not be at an absolute bottom, we may be close,” said Peter Jankovskis, who helps oversee $1.9 billion as co-chief investment officer of Lisle, Illinois-based OakBrook Investments. “Oil has been a very strong theme, though I think certainly in months that are heavy in central bank decisions that central bank activity has to a degree overwhelmed oil.”

Investors are keeping close watch on progress in the economy to gauge the trajectory of U.S. interest rates before the Federal Reserve’s meeting next week. Data today showed the number of applications for unemployment benefits unexpectedly increased last week to a six-month high, indicating tempered progress in the labor market.

Expectations for a rate hike at the Fed’s January meeting have been low since December’s increase in borrowing costs. Now, those for March are falling too, with traders trimming the chances to 21 percent, from even odds at the end of last year.

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Corporate earnings may also offer cues on the strength of the U.S. economy, with the few companies that have reported so far mostly exceeding estimates. American Express Co. and Starbucks Corp. are among S&P 500 companies scheduled to release financial results after the market closes today. Analysts predict profits for index members slumped 7 percent in the final three months of 2015, while sales fell 3.1 percent.

The Chicago Board Options Exchange Volatility Index fell 4.9 percent Thursday to 26.24. The measure of market turbulence known as the VIX has surged about 44 percent so far in 2016, and is on track for its biggest climb since a record-setting jump in August.