* Japan crisis will keep driving trading
* S&P 500 back in black for year
* Dow up 1.3 pct, S&P up 1.3 pct, Nasdaq up 1 pct
* For up-to-the-minute market news see []
(Changes byline; updates to late afternoon trade)
By Angela Moon
NEW YORK, March 17 (Reuters) - Wall Street rebounded on
Thursday after three days of declines, but investors were not
convinced that the advance would last as concerns about Japan's
nuclear crisis persisted.
All three major U.S. stock indexes recovered from
Wednesday's lows, which had put both the benchmark S&P 500 and
the Nasdaq in negative territory for the year.
The S&P 500 climbed back into the black for 2011 with
Thursday's gain. But the Nasdaq could not hold on to its
morning move back into positive territory. By early afternoon,
the Nasdaq was negative again for the year.
But while the day's bounce relieved some worries about the
market's recent slide, it did not change the view that a
correction is under way.
"As the headlines come out of Japan, there are more nervous
traders liquidating their long positions in futures put on this
morning," said Steve Leuer, stock-index futures trader at X-FA
Trading firm in Chicago.
From a chart standpoint, "I don't see anything right now
that suggests that the near-term decline is over," said Chris
Burba, short-term market technician at Standard & Poor's in New
York.
The Dow Jones industrial average <> was up 148.08
points, or 1.28 percent, at 11,761.38. The Standard & Poor's
500 Index <.SPX> was up 15.77 points, or 1.25 percent, at
1,272.65. The Nasdaq Composite Index <> was up 25.72
points, or 0.98 percent, at 2,642.54.
The recent declines followed a rally of nearly six months
in stocks. That rally in itself has prompted calls for a market
correction.
The CBOE Volatility Index VIX <.VIX>, Wall Street's fear
gauge, fell 9.1 percent to 26.74 as stocks rose, but it was
still at a high level, compared with the recent average of
about 20.
On Thursday, natural resource stocks helped lead the market
as commodity prices rebounded. Tensions in the Middle East and
North Africa drove oil prices up sharply. Brent crude for May
delivery <LCOc1> gained $4.37 to $114.97 a barrel.
Cliffs Natural Resources Inc <CLF.N> rose 6.2 percent to
$88.89 while Chevron Corp <CVX.N> gained 2.6 percent to
$102.11.
The S&P energy index <.GSPE> shot up 2.7 percent, leading
gains in the S&P 500, even though the prospect of higher fuel
costs in general have hurt stock investor enthusiasm in recent
weeks.
A correction at this point could be short-lived, some
analysis suggests.
Cleveland Rueckert, an analyst at Birinyi Associates Inc.
in Stamford, Connecticut, said in a note: "Since 1945, 5
percent declines that occur during a broader rally last an
average of 41 days and decline 8.29 percent.
"If the averages hold, the S&P 500 will bottom at 1,232" on
March 31, Rueckert wrote.
Economic bellwether FedEx Corp <FDX.N>, the world's largest
cargo airline, forecast improved revenue, boosted by strong
demand. The stock rose 3.5 percent to $88.25 and helped lift
the shares of United Parcel Service Inc <UPS.N>, the largest
package delivery company. UPS stock gained 2 percent to $71.81.
[]
(Reporting by Angela Moon; Additional reporting by Doris
Frankel; Editing by Jan Paschal)
