Traders work on the floor of the New York Stock Exchange. (Spencer Platt/Getty Images)
"We're kind of rallying late here on speculation about what the G7 will do over the weekend," said John O'Brien, senior vice president at MKM Partners LLC in Cleveland.
Earlier, all three major U.S. stock indexes were sharply lower as panicked investors dumped stocks on mounting fears that frozen credit markets would push the global economy into recession.
The Dow Jones industrial average was up 273.75 points, or 3.19 percent, at 8,852.94. The Standard & Poor's 500 Index was up 16.55 points, or 1.82 percent, at 926.47. The Nasdaq Composite Index was up 42.25 points, or 2.57 percent, at 1,687.37.
