Stocks bounced back Tuesday, following the worst start to the month of March on record for the market.
The Dow Jones Industrial Average gained more than 70 points, or 1 percent, at the opening bell, after a selloff Monday that sent the Dow to a sub-7,000 closefor the first time in 12 years.
Investors scooped up bargains, keeping an eye on Washington as both Federal Reserve Chairman Ben Bernanke and Treasury Secretary Tim Geithner are slated to testify before Congress.
>> LIVE NOW: Watch the live streaming video of Bernanke's testimony.
The Federal Reserve and Treasury today launched the TALF, a $200 billion credit infusionaimed at loosening the availability of credit for consumers and small businesses. Officials say it could generate up to $1 trillion in lending.
Geithner is slated to testify before a House panel at 12:30 pm ET and investors hope he will shed light on the Obama administration's plans to shore up the financial system.
In the day's only major economic data point, pending-home sales dropped 7.7 percentto the lowest level on record, the National Association of Realtors reported.
And, with job losses piling up and confidence tanking, the NAR expects such sales to continue to slide.
Home prices are already down 20 percent from the market peak in 2007, and aren't expected to bottom out until mid-year — at the earliest — stirring baby boomer worries about retirement.
Beaten-down banks led the rebound, with Citigroup , whose shares are heading into penny range after the government sharply increased its stake in the banking titan, and Bank of America the biggest percentage gainers on the Dow.
Bank of America CEO Ken Lewisexpressed regret over his request for $20 billion of government aid to the FT newspaper. He said asking for such a large sum to help absorb Merrill Lynch’s losses was a "tactical mistake."
Meanwhile, the head of the Federal Deposit Insurance Corp Chairman Sheila Bair played down fears of prolonged bank nationalizations; by saying the government was unlikely to operate any large financial institutions for a long period.
Shares of JPMorgan Chase gained more than 2 percent following a report that the company made $5 billion last year by trading over-the-counter fixed-income derivatives.
AIG shares soared more than 10 percent as this latest bailout of the insurance giant continued to divide opinion. Many market pros say AIG is too big to fail but legendary investor Jim Rogers told CNBC it, together with other sick financial institutions, should be allowed to go bankrupt.
He also, incidentally, told CNBC that he's started buying land and farming.
"If I'm right, agriculture is going to be one of the greatest industries in the next 20 years, 30 years," Rogers said.
Oil prices also staged a rebound after a sharp drop Monday. US light, sweet crude gained more than a dollar, trading above $41 a barrel. The move spilled into stocks, with Chevron and ExxonMobil up more than 1 percent.
Investors kept a weather eye on the banking sector in Europe as shares of HSBCtook another hammering after launching its deeply discounted rights issue Monday.
There were numerous corporate earnings due before the bell, including AutoZone, Delta Petroleum and Trina Solar .
TUESDAY: Fed launches TALF lending program; auto sales; pending-home sales; Geithner to testify before House panel on budget; Obama meets with UK prime minister
WEDNESDAY: Weekly mortgage applications; ADP, Challenger jobs reports; ISM services index; Fed's beige book; Earnings from BJ's, Costco and Toll Bros.; UK prime minister addresses joint session of Congress
THURSDAY: Chain-store sales; European rate decisions; weekly jobless claims; factory orders; Senate hearing on AIG
FRIDAY: Jobs report; consumer credit
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