NEW YORK — Investors are finding fresh reasons to bet on an economic rebound.
Stocks jumped Thursday as gains in commodities such as oil signaled that traders expect a strengthening economy to demand more energy.
Ample demand at an auction for Treasury debt also eased fears that the government would have to pay higher interest rates to entice buyers. Higher rates on long-term bonds would also drive up borrowing costs for consumers buying cars and homes, which in turn could endanger an economic recovery.
Major stock indicators rose more than 1 percent, including the Dow Jones industrial average, which gained almost 104 points.
It was the second straight day that interest-rate movements called the shots in the stock market, and not likely the last.
Analysts expect Wall Street will continue to grapple with worries that the government could eventually exhaust buyers’ appetite for debt with an unprecedented level of bond sales as Washington funds its bank-rescue and economic- stimulus measures.
A jittery first half to the day’s trading followed a big drop Wednesday because of a spike in long-term interest rates as the yield on the 10-year note jumped to its highest rate in six months.
Traders say the fractiousness could continue as investors look for data to prove that their bets this spring on an economic recovery were correct. The Standard & Poor’s 500 index, considered the most reliable measure of the broader market, is still up 34 percent from a 12-year low in early March.
The Dow rose 103.78, or 1.3 percent, to 8,403.80. The S&P 500 index rose 13.77, or 1.5 percent, to 906.83, and the Nasdaq composite index advanced 20.71, or 1.2 percent, to 1,751.79.
The gains returned the S&P to the black for the year after it slid Wednesday. The Dow is down 4.3 percent in 2009, the Nasdaq up 11.1 percent.
Analysts expect trading could remain bouncy as investors move beyond simply predicting the economy will recover and start looking for stronger signs of improvement. The uncertainty could make it difficult for the market to hold its gains, though many analysts don’t expect stocks to fall again to the levels of early March.
“We’re looking for a summer where the market is going to pretty much be trading sideways,” said Brian Dolan, chief currency strategist at .
The stock market logged its best month in nine years in April, but the advances heading into the final day of trading for May are far more modest. Still, a gain for May would mark the third straight month of advances.
