Stocks surge in late-day rally

By Herbert Lash

NEW YORK (Reuters) - Investors snapped up beaten-down energy shares on Thursday, lifting U.S. stocks in a roller-coaster session and easing the aversion to risk that has been gripping global financial markets, while oil rose in anticipation of an OPEC cut in crude production.

U.S. stocks partially clawed back from five-year lows as a surge in oil shares turned currency and government debt markets higher in volatile trade, and pulled European shares off losses as deep as 3.2 percent to close barely lower.

The tech-rich Nasdaq fell on concerns technology spending will decline in a global downturn. Online retailer Amazon.com Inc, which had suffered steep losses for most of the day after saying holiday sales at year's end would miss Wall Street expectations, eked out a small gain at day's end.

Energy shares surged on both sides of the Atlantic, pushed up by rising crude prices a day before an emergency meeting of the Organisation of Petroleum Exporting Countries.

Many OPEC members have called for a cut in oil production, and the S&P Energy Index surged 6.6 percent.

Oil giants were the major gainers in Europe, with BP and Royal Dutch Shell both rising more than 5 percent. Exxon Mobil and Chevron rose 9 percent and 8.2 percent, respectively, leading the Dow to a 2 percent gain.

Despite the late-day surge, analysts said U.S. stocks rose off oversold conditions, and they were cautious about the market's ability to sustain a rally amid a darkening economic outlook in the United States and worldwide.

"The market overall remains very radically oversold but it has been for weeks now," said Chip Hanlon, president of Delta Global Advisors Inc in Huntington Beach, California.