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Wall Street gains in choppy trading

Traders work on the floor of the New York Stock Exchange January 29, 2015. REUTERS/Brendan McDermid

By Sinead Carew

NEW YORK (Reuters) - U.S. stocks were up in a volatile session on Thursday as oil futures pared their losses and strong job market data helped offset weak earnings reports from companies such as Alibaba and Qualcomm.

The S&P 500 hit a session high in the afternoon when nine out of 10 of the index's sectors turned positive. It had fallen as much as 0.65 percent earlier.

The confluence of low oil prices and a strong dollar, which is hurting some companies, is distracting investors from what is actually an average earnings season, said Art Hogan, chief market strategist at Wunderlich Securities in New York.

"This is the first time we've had a quarter we've had to deal with both dynamics in this business cycle," said Hogan.

"We're looking at the big household names that put out disappointing numbers this week and we're putting undue influence on that."

Shares in Chinese internet giant Alibaba Group dropped 9 percent to $89.46 after revenue missed expectations, which also pushed down shares in part-owner Yahoo.

"The growth story of China is called into question" by the Alibaba results, said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

Qualcomm weighed the most on the Nasdaq 100 down 11.4 percent to $62.93, after trimming its 2015 outlook and warning that its newest chip will not be in a major customer's phone.

At 2:16 p.m., the Dow Jones industrial average rose 121.58 points, or 0.71 percent, to 17,312.95, the S&P 500 gained 8.29 points, or 0.41 percent, to 2,010.45 and the Nasdaq Composite added 15.46 points, or 0.33 percent, to 4,653.46.

Supporting stocks, data showed weekly applications for unemployment insurance fell to their lowest in almost 15 years, adding to bullish signals on the labor market.

Investors also continued to digest Wednesday's Federal Reserve statement, which reiterated confidence in the U.S. economy but referred to international developments, making some investors worry that rates could rise later than expected.

"The clearer the Fed wants to be the more it spooks the markets," said Quincy Krosby, market strategist at Prudential Financial in Newark.

"The statement yesterday was confusing for markets. They (the Fed) put sentences in there for everyone."

Coach Inc shares rose 6 percent to $38.71 after the handbag maker posted a better-than-expected quarterly profit.

McDonald's added 4.9 percent to $93.12 after it said Chief Executive Don Thompson would leave at the end of February and be succeeded by chief brand officer Steve Easterbrook.

The energy sector of the S&P 500 pared losses along with U.S. crude oil, which traded down 27 cents a barrel at $44.17. The sector was down 0.6 percent after earlier falling almost 2 percent.

Advancing issues outnumbered declining ones on the NYSE by 1,669 to 1,330, for a 1.25-to-1 ratio; on the Nasdaq, 1,471 issues rose and 1,167 fell for a 1.26-to-1 ratio.

The S&P 500 was posting 10 new 52-week highs and 26 lows; the Nasdaq Composite was recording 29 new highs and 100 lows.

(Additional reporting by Rodrigo Campos; Editing by Bernadette Baum and Nick Zieminski)