Stocks in North America halted their rout on Wednesday, anticipating a reprieve from bad news about China as its markets will be closed for the next two days.
The Dow was up 129 points at midday at 16,189 and the broader S&P 500 index was 150 points higher at 1,929.
- DON PITTIS: Canada might be in a recession, but are you?
The TSX composite index climbed 35 points at 13,515.
Oil resumed the decline it began Monday after recovering to $48 US a barrel on Friday. West Texas Intermediate, the benchmark North American contract, was down $147 to $43.94 US a barrel after government data showed U.S. oil inventories are rising.
Oil stocks expanded by 4.67 million barrels in the U.S. after refineries shut down for maintenance.
Global stocks have been in a rout the last two days amid concerns that a slowdown in China will hamper growth around the world.
Disappointing manufacturing data from the United States and China that emerged on Tuesday contributed to further volatility on Asian markets Wednesday. A U.S. manufacturing index hit its lowest level in two years and the PMI index out of China showed the sector there is sinking.
The Shanghai Composite Index in mainland China fell as much as 4.4 per cent in early trading, before climbing back to end up with two per cent loss at 3,105.13. Hong Kong's Hang Seng dropped 1.1 per cent, but Japanese stocks moved higher.
2-day holiday in China
Chinese markets will be closed the next two days because of a special holiday to mark the 70th anniversary of the surrender of Japan at the end of the Second World War.
A pessimistic assessment of the global economy by International Monetary Fund managing director Christine Lagarde helped European stocks start the day lower.
In a speech in Indonesia, Lagarde said Asia is still expected to lead global growth, but the pace is slowing and could sag further because of recent financial market volatility.
"Overall, we expect global growth to remain moderate and likely weaker than we anticipated in July," Lagarde said.
But European stocks recovered in later trading encouraged by the EU's lower unemployment levels and prospect of a respite from Chinese news.
In North America, markets are anticipating the release of employment numbers from both the U.S. and Canada on Friday.
In advance of official data, payroll processor ADP reported that businesses added 190,000 jobs in June, suggesting that hiring continues despite the turmoil in the stock market.