Wall Street rallied on Wednesday for the second day in a row as crude oil surged to two-month highs, setting off a flurry of buying in the energy sector and allowing fears about plunging Chinese stocks to evaporate. 

Today's Markets 

The Dow Jones Industrial Average jumped 61.22 points, or 0.66%, to 9279.16, the Standard & Poor's 500 rose 6.79 points, or 0.69%, to 996.46 and the Nasdaq Composite picked up 13.32 points, or 0.68%, to 1969.24. The consumer-friendly FOX 50 added 5.31 points, or 0.74%, to 727.51.

The markets did a 180 on Wednesday as the Dow tumbled nearly 100 points at the open after a wave of selling overseas flooded onto Wall Street. But the bulls shrugged off the Chinese selloff, which sent the Shanghai Composite into another bear market. Energy stocks led the comeback as the sector rallied around a 4.7% spike in oil prices, which came after a bullish inventory report.

“I am very impressed," NYSE trader Ben Willis of VDM Institutional Brokerage told FOX Business. "I was and still am looking for a 10% correction off our tops. But the market is showing incredible resiliency.”

Thanks to that resiliency, more than half of the Dow's 30 components ended in positive territory, led by drug giants Merck (MRK) and Pfizer (PFE) and strong gains for energy titans ExxonMobil (XOM) and Chevron (CVX). On the downside, aluminum maker Alcoa (AA) fell 3% on a downgrade from Goldman Sachs. 

Combined with Tuesday's 83-point rally, the Dow has now recaptured more than half of its two-day plunge. Slammed by fears about the prospects for an economic recovery, the benchmark index tumbled 263 points in just two sessions, its worst stretch in two months. 

With earnings season nearing an end and politicians in Washington on recess, the bulls have struggled to find a reason to keep this summer's surge rolling. 

“I could see us sort of staying here for the rest of the month -- that’s probably healthy. Unless something comes out earth-shatteringly good, I think we’re in flatline mode for a while,” said Art Hogan, chief market strategist at Jefferies & Co.

The markets began their turnaround Wednesday as energy stocks like Valero (VLO) and Halliburton (HAL) rose more than 2% a piece on the action in the oil market. Crude oil surged into positive territory after the government said crude supplies tumbled 8.4 million barrels last week, compared to expectations for a modest build. After the bullish inventory report, crude closed up $3.23 a barrel, or 4.67%, to $72.42 -- the highest settle since June 11.

A sharp increase in oil prices isn't typically something Wall Street cheers but the energy sector makes up more than 20% of the S&P 500. At the same time, crude oil is seen as a barometer for the economy. Increased demand for oil suggests better times ahead for the economy. 

It was economic fears that again weighed on Wall Street at Wednesday's open as traders took their cues from overseas. The plunge in Chinese shares reinforced the bears’ argument that stocks have gotten too far ahead of the still-weak economy. Strikingly, China’s bull-to-bear transition happened in a matter of days as the Shanghai Composite hit 2009 highs on August 4. Then again the index had been up some 80% from its lows. 

“It’s dramatic enough to pay attention to. It’s looking a little wobbly over there. If they were in better shape than us, and they are having a sharp selloff, what does that mean when we look at ourselves?” said Frank Davis, director of sales and trading at LEK Securities..

Corporate Movers

UBS (UBS) will reveal account information on 4,450 U.S. clients as part of a tax deal signed between the U.S. and Swiss governments. The deal does not require UBS to pay a fine.

Deere (DE) blamed a 27% slide in quarterly sales on weak international demand but the farm and construction equipment maker’s EPS of 99 cents easily topped estimates. Deer’s revenue fell by a better-than-expected 24% to $5.89 billion.

Citigroup (C) was directly pressured by U.S. regulators to replace former CFO Ned Kelly last month, the Financial Times reported. The bailed-out bank reportedly told regulators in a confidential document it would consider replacing Kelly before October.

Alcoa (AA) tumbled more than 3% after Goldman Sachs downgraded the aluminum titan to “neutral” from “buy” amid changing supply-demand dynamics and valuation issues.

Freeport-McMoRan (FCX) closed 2% higher as Goldman Sachs added the world’s largest publicly traded copper producer to its conviction buy list as part of the bank’s bullish copper call.

BJ’s Wholesale (BJ) weighed in with a better-than-expected 3.9% decline in second-quarter net income and the warehouse club operator boosted its full-year earnings guidance. BJ’s said its revenue tumbled 5.2% to $2.5 billion as its same-store sales slumped 7.7%.

Perry Ellis International (PERY) narrowed its second-quarter loss to a better-than-expected 42 cents a share as the apparel company offset slumping sales with cost-cutting measures. Perry Ellis said its sales tumbled 18% to $159.2 million, coming up short of analysts’ estimates.

Global Markets

European markets closed mixed but off their lows. The U.K.'s FTSE 100 rose 0.08% to 4689.67, France's CAC 40 sank 0.01% to 3450.34 and Germany's DAX lost 0.36% to 5231.98. 

In Asia, Japan's Nikkei 225 fell 0.79% to 10204.00, Hong Kong's Hang Seng dropped 1.73% to 19954.23 and China's Shanghai Composite plunged 4.3% to 2785.58.