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Stocks Post Biggest 3-Day Gain Since August as Oil Rises

U.S. stocks closed more than 1.5 percent higher Wednesday for their largest three-day gain since late August, helped by some recovery in oil prices and encouraging economic data.

The Dow Jones industrial average and S&P 500 posted their first three-day win streak of 2016. The S&P also had its third-straight day of plus-1 percent gains since 2011.

"The strength of this rebound, what it's showing to me is, people want to be in this market," said Tom Siomades, head of Hartford Funds Investment Consulting Group.

He said signs that "China is not going to implode" and stabilization in oil prices, which topped $30 a barrel Wednesday, supported gains.

In the last three trading days the Dow gained 5.07 percent, the S&P 500 rose 5.34 percent, and the Nasdaq composite surged 6.26 percent, marking their largest three-day gain since Aug. 28, 2015. U.S. markets were closed Monday for Presidents Day.

"I think the economic statistics probably took over more than anything. When the markets were coming down there was a big fear of recession," said Ben Pace, chief investment officer at HPM Partners. The recent data shows "we might be slow from an economic perspective but we're not close to a recession."

"I think stocks are rallying on economic fundamentals and the fact that oil is up," he said.

U.S. crude oil futures settled up $1.62, or 5.58 percent, at $30.66 a barrel, holding most of their gains after comments from the Iran oil minister raised hopes for the possibility of cooperation on an agreement to freeze production.

Luana Siegfried, energy research associate at Raymond James, was skeptical of the likelihood of a deal. "So far it's more trading on news than any specific fact," she said, also attributing the gains in oil to a rebound from Tuesday's decline.

Iran Oil Minister Bijan Zanganeh said he supports any effort to stabilize the market and prices, according to a Reuters report citing the Iranian oil ministry's official Shana news agency. The Iran oil minister also said in the report the Tehran oil producers meeting was good.