US stocks were staging a furious late-afternoon rally on Thursday, closing with gains after erasing a near 600-point drop in the Dow Jones Industrial Average.

The Dow rose 258 points, or 1.1 percent, adding to Wednesday's record gain of 1,086 points.

The S&P 500 added 21 points to 2,488.

Stocks slumped for most of the day as the selling that had gripped the market for most of December resumed.

At its lowest, the Dow was down 611 points and the S&P off by 70.

Even with the rally, the indexes remain sharply lower for December and down for the full year with only two trading sessions remaining.

Gainers outnumbered losers in the S&P 500 by 3 to 2.

In early afternoon, only 5 stocks in the benchmark index were higher.