A back-and-forth trading day ended solidly in the green on Thursday as Wall Street benefited from a strong day for energy stocks and breathed a sigh of relief the bond market avoided another collapse.

Today's Markets

The Dow Jones Industrial Average jumped 103.78 points, or 1.25%, to 8403.80, the S&P 500 added 13.77 points, or 1.54%, to 906.83 and the Nasdaq Composite rose 20.71 points, or 1.20%, to 1751.79. The consumer-friendly FOX 50 gained 8.06 points, or 1.23%, to 664.

The markets were tugged in one direction or the other throughout the day, reacting to the latest mixed signals about the economy, a fresh 2009 high for crude oil, new signs a General Motors (GM) bankruptcy is imminent and a seven-year Treasury auction.

“The markets continue to be very thin and whipped around by traders’ sentiments, which are changing every ten minutes,” said Michael James, senior equity trader at Wedbush Morgan Securities. “I expect the markets to be extremely choppy and volatile at least through tomorrow.”

The triple-digit rally helped the markets recoup most of Wednesday's bond-market fueled selloff, putting the markets on track for their best weekly performance in nearly a month.

Most of the Dow's 30 components closed in the green, led by JPMorgan Chase (JPM), American Express (AXP) and Bank of America (BAC). On the other hand, Home Depot (HD) and Caterpillar (CAT) closed solidly in the red.

“It’s a market that is discriminating between those that will benefit from an inflationary environment and those that will be hurt by it,” said Peter Boockvar, equity strategist at Miller Tabak..

With that in mind, commodity and commodity-related stocks were the biggest winners on Thursday as crude settled at fresh 2009 highs and energy stocks jumped nearly 3.5%. Rising for the fourth-straight day, crude settled at $65.08 per barrel, up $1.63, or 2.57%. 

“Every summer rolls around and the prices start to rip again. It’s taking all the stocks along with it,” NYSE trader Jason Weisberg of Seaport Securities told FOX Business.

The energy rally came after OPEC decided to leave output levels steady and a new report showed crude inventories plunged by 5.4 million barrels last week -- blowing away expectations for a 500,000 barrel decline. Energy stocks like Hess (HES) and Schlumberger (SLB) jumped on the news.

Wall Street continues to closely track the action in the bond markets, underscoring growing fears that a spike in inflation and interest rates will hamper an economic recovery. Stocks turned solidly green Thursday as Treasuries rallied even though the government's $26 billion sale of seven-year Treasury notes received less-than-stellar demand.

"Even though the demand was only so-so, there was a lot of fear it would have been worse than what it was. It was a sigh of relief,” said Boockvar.

The action in the energy and bond markets overshadowed a number of other major stories.

On the auto front, GM reached a deal with a bondholder committee to exchange debt for equity, a move that could allow the auto maker to more quickly emerge from bankruptcy and with a healthier balance sheet. GM is widely expected to file for bankruptcy on or around June 1 and then proceed to spin off its "good assets" in a 363 sale, similar to Chrysler's bankruptcy process.

Mixed Economic Picture

The markets' search for signs the economy is recovering -- not just stabilizing -- continued unsuccessfully on Thursday.

While the Commerce Department said durable goods orders unexpectedly surged by 1.9% in April -- widely beating expectations -- the government also sharply cut estimates for March orders.

Similarly, the government said initial jobless claims tumbled by 13,000 last week, twice as much as economists had predicted, but continuing claims climbed by 110,000 to 6.8 million -- the 20th consecutive record. 

Also, the Commerce Department said new home sales rose just 0.3% in March, well shy of the 2.5% increase economists had predicted. Even though the report showed inventories continued to drop, home building stocks like Lennar (LEN) and DR Horton (DHI) tumbled.  

Corporate Movers

Chrysler LLC CEO Bob Nardelli said the bankrupt auto maker's sale to Fiat could close as early as Friday, Dow Jones Newswires reported. 

Proctor & Gamble (PG) issued a cautious outlook, predicting 2010 earnings of $3.65 to $3.80 per share. Analysts had been forecasting full-year earnings of $3.93 per share. 

Time Warner (TWX) unveiled long-awaited plans to separate its AOL division into an independent, publicly-traded company around the end of the year. The media giant said it plans to purchase Google's 5% stake in the business. 

Costco (COST) suffered a worse-than-expected 29% decline in its third-quarter profit as its same-store sales tumbled 7%. Revenue also missed estimates, falling by 5% to $15.48 billion.

Heinz (HNZ) reported an in-line 9.8% decline in quarterly profit but downgraded its guidance for the new year. The company sees full-year earnings of $2.60 to $2.70 per share, down from its earlier forecast of $2.90 per share.

Visteon (VSTN), one of the largest U.S. auto parts suppliers, plans to put its U.S. business into Chapter 11 bankruptcy protection Thursday, The Wall Street Journal reported. The potential filing could complicate matters for Ford (F), which Visteon used to be a division of.

Global Markets

European markets ended their winning streak. London's FTSE 100 fell 0.65% to 4387.54, Germany's DAX 1.36% to 4932.88 and France's CAC 40 sank 0.95% to 3263.70.

In Asia, Japan's Nikkei 225 added 0.13% to 9451.39 and Hong Kong's Hang Seng was closed.