Wall Street snapped its three-day losing streak on Wednesday thanks to a rebound in commodity prices and Dell's strong earnings, but investors say stocks still face headwinds.

Wednesday's bounce gave some respite to selling that has driven the S&P 500 down nearly 2 percent this month as soft economic data has put investors on the defensive.

We're seeing a snap back. Is it sustainable? That is the going to be the million-dollar question, said David Lutz, managing director of trading at Stifel Nicolaus Capital Markets in Baltimore.

The stock market has slipped in tandem with sharp declines in commodities that have prompted investors to pare their riskiest bets. Some believe it points to a sustained correction, but Wednesday's action shows fund managers are keen to buy on dips.

U.S. crude oil futures rose more than 3 percent to settle back above $100 a barrel as crude inventories unexpectedly fell. Chevron Corp rose 2.4 percent to $102.86, giving the Dow one of its biggest lifts.

Dell's shares jumped 5.4 percent to $16.75 after the PC manufacturer reported profits late on Tuesday that exceeded expectations. The company also raised its fiscal 2012 outlook for operating income.

The rally has been led by the raw materials, which is linked to a rebound in some of the commodity prices, said Nick Kalivas, an analyst at MF Global in Chicago. The earnings were strong and breathed some life back into technology.

Also in the tech sector, microchip maker Analog Devices Inc posted quarterly profit that topped market expectations, sending its shares up 5.9 percent to $42.60. The Philadelphia semiconductor index <.SOX> rose 1.9 percent.

Lutz said developments around Europe's debt crisis over the next few days could determine the market direction as top EU officials talk about a possible debt restructuring for Greece.

The Dow Jones industrial average <.DJI> gained 80.60 points, or 0.65 percent, to 12,560.18. The Standard & Poor's 500 Index <.SPX> rose 11.70 points, or 0.88 percent, to 1,340.68. The Nasdaq Composite Index <.IXIC> added 31.79 points, or 1.14 percent, to 2,815.00.

Helping transportation stocks, U.S. railroad operator CSX Corp said it is targeting double-digit growth in earnings per share and operating income through 2015, expecting growth that outpaces the economy.

CSX shares rose 2.2 percent to $75.44. The Dow Jones Transportation Average<.DJT> gained 1.6 percent.

Most Federal Reserve officials prefer to raise benchmark interest rates before selling assets when the time comes to tighten policy, minutes of their April meeting showed on Wednesday.

Exxon Mobil Corp advanced 1.7 percent to $81.74. The PHLX oil service sector index <.OSX> climbed 2.6 percent. The S&P energy index <.GSPE> added 2 percent and shared the spotlight with materials as the S&P 500's top-performing sectors.

The S&P materials index <.GSPM> gained 2.1 percent, buoyed by mining company Freeport-McMoRan Copper & Gold -- up 3.8 percent at $48.62.

The Reuters/Jefferies CRB index <.CRB>, a broad measure of commodity performance, rose 2.3 percent. Before Wednesday's advance, the CRB index was down more than 9 percent for the month.

Staples Inc's shares tumbled 15.4 percent to $16.63 and ranked as the S&P 500's biggest percentage loser after the office supply retailer slashed its full-year outlook on weak demand and higher costs.

About 6.5 billion shares were traded on the New York Stock Exchange, NYSE Amex and Nasdaq, compared with the average of about 8.4 billion last year.

Advancing stocks outnumbered declining ones on the NYSE by almost 4 to 1, and on the Nasdaq, by a ratio of about 3 to 1.

(Editing by Jan Paschal)