From Sinatra! the Song is You: A Singer's Art by Will Friedwald:
(Cole) Porter wrote "Night and Day" in 1932 as a vehicle for Fred Astaire in the Broadway musical Gay Divorce. When the show became the basis for Astaire's first starring film, The Gay Divorcée (RKO, 1934), "Night and Day" became the sole song from the original score to be retained in the picture. It's not too much of an exaggeration to say that "Night and Day" represents the centerpiece of both Astaire's and Porter's movie careers.
The song itself appeared in at least four other films (including a wartime short with Dinah Shore warbling special anti-Axis lyrics), not the last of which (if inarguably the least) was Night and Day, Warner Bros.' ludicrous Porter biopic in 1946. (p. 43)
Concerning the importance of the song to Frank Sinatra's career, Friedwald writes:
Sinatra's personal association with "Night and Day" goes back years before he first recorded it in 1942 and even before the singer himself was "discovered" in 1939 by Harry James...Around 1937 or 1938, Sinatra was singing with a "club-date" style septet at the Rustic Cabin, a roadhouse near Englewood Cliffs, New Jersey. The trumpet player, named Johnny Bucini, said to Sinatra, "Do you know who's sitting out there?" Sinatra said, "Yeah, I know that face. It's Cole Porter!" (p. 44)
Sinatra then proceeded to make a big deal about Porter being in the audience, causing the legendary songwriter to get up and take a bow. Sinatra directed the band to play "Night and Day," and the 22-year-old crooner did the first four bars and forgot all the rest of the words. The story goes that he then simply repeated "Night and day, night and day" for fifteen bars.
Whether it was to prove he could actually do the song as written, or simply because he really liked it, Sinatra recorded "Night and Day" five times during his nearly seven decade career. I've brutally mashed four different parts from four of his studio recorded versions of "Night and Days" together. Because it's not arranged chronologically, let me describe each part:
The fifth version was recorded in 1977 when Sinatra recorded vocal tracks of "Night and Day" and "All or Nothing at All" on top of disco orchestral backings. I've never heard it, but apparently it was released as a single.
Steve Lawrence did an uptempo version in 1960. The guy must have had some major cojones to record this as a relative unknown at the height of Sinatra's fame and power. Sinatra always seemed to like Steve Lawrence, and maybe one reason why is he respected him for having done it. I think it also was a relief to Sinatra that in the era of Elvis, younger singers were still recording his style of music.
U2 updated "Night and Day" in 1990 on the Cole Porter tribute album, Red Hot + Blue. I have to believe Bono had never heard any of Sinatra's versions when he sang it. Otherwise, like for Steve Lawrence, it would have been a little nerve wracking to record something so closely associated with another singer, especially a legend such as Frank Sinatra. Here is the video U2 made for the single (note: Red Hot + Blue was an AIDS charity album, hence the band members' dour expressions):
In 1982, English musician/singer-songwriter Joe Jackson named his fifth album for the song. He titled an album released in 2000, Night and Day II. Neither album has a version of the Cole Porter tune. Jackson was most likely attempting to put the record buyer in the mind of the aesthetic and style of the Cole Porter/Art Deco era. He had been categorized as "punk rock" up until Night and Day, so along with the album's cover, use of the title perhaps signified his musical style-shift to a more adult-oriented sound.