Stocks remained higher Wednesday, led by energy and financials, as investors grabbed bargain shares beaten down in the prior session's selloff.
A report showing pending-home sales hit a six-month high gave the market an extra boost.
The Dow Jones Industrial Average was up nearly 200 points, or 1.8 percent, after sliding 1.1 percent in the previous session. The Nasdaq and S&P 500eachgained more than 2 percent.
Disney and Hewlett-Packard were the Dow's top gainers.
JPMorgan rose after the stock was upgraded to "buy" from "neutral" by UBS. The S&P financial-sector index gained 1.5 percent.
Still, not everyone is convinced today's gains are here to stay.
“This is a fake rally—stocks are going up today and there’s no rhyme or reason,” said Todd Schoenberger, managing director at LandColt Trading. “From this point, don’t be shocked if we see another 5 percent S&P drop in June because there’s too much evidence for bears to win this tug of war match.”
Schoenberger favors cash and high-yield bonds over equities.
Apple rose amid buzz about Steve Jobs' appearance at the D8 digital conference.
BP bounced back, after worries about the latest failed attempt to cap the spill and criminal charges over the case rattled the sector — and the entire market — on Tuesday.
JPMorgan kept its "overweight" rating on BP, which it said has become heavily undervalued during the spill crisis.
In a renewed effort to halt the unrelenting oil, BP sent robot submarines wielding powerful cutting tools 5,000 feet down into the ocean.
Meanwhile, President Barack Obama vowed an overhaul of laws and regulations needed to prevent a repeat of the April 20 rig explosion that killed 11 people and triggered the spill.
Other oil service companies such as Halliburton and Schlumberger advanced more than 5 percent.
Oil prices climbed above $73 a barrelwhile gold slipped near $1,220as investors cashed in some of the previous session's gains. And the dollar rose against both the euro and yen after the resignation of Japanese Prime MinisterYukio Hatoyama.
Ford shares rose after the auto maker said its US sales in May jumped more than 20 percentfrom the same time last year. Rival General Motors saw a 30 percent jump in sales of its remaining brands, while Toyota sales rose just 6.7 percent.
Meanwhile, during the FCIC hearing, Warren Buffett distanced himself from embattled credit rating agencies such as Moody's and Standard & Poor's, which is owned by McGraw-Hill , saying they have lost some of their appeal as an investment amid criticism over their role in propelling the financial crisis.
"I think they were wrong like everyone else,'' Buffett said and "looking back," credit rater Moody's should have recognized there was a housing bubble and not given such good ratings to what turned out to be disasterous investment vehicles.
"Rating agencies sort of evolved into this national duopoly,'' he continued. "The market will continue to demand from the brand names. I wish it weren't the case."
Watch a live feed of the FCIC hearing
In the day's economic news, pending-home sales jumped 6 percentin April from March to their highest level since October. Economists had expected a gain of just 4.3 percent.
Plus, mortgage applications fell for a fourth straight weekand planned layoffs rose 1.3 percentin May from April but were down 65 percent from a year earlier. The private-sector hiring ADP employment report would normally be out today, two days before the monthly jobs report, but it was delayed by a day because of the Memorial Day holiday.
Forecasts for Friday's May jobs report are particularly optimistic, with economists expecting to see that 425,000 jobs were added to nonfarm payrolls last month and that the unemployment rate dropped to 9.8 percent.
“If we have a 6-digit figure in private sector employment, then stocks will move higher,” Schoenberger said. “But that’s going to be unlikely — I see private sector employment reach no more than 50,000.”
“And seasonally during the summer, you go into a slower job hiring pattern,” he said.
Target shares rose following news that the the discount chain will begin selling Amazon's Kindle in all stores starting this weekend.
Collective Brands tumbled after the company reported its first-quarter results.
Amgen shares continued to climb after the FDA approved the company's bone-strengthening drug, Prolia, for postmenopausal women at risk for fractures.
Google expects to release its Chrome computer operating systemin the "late fall," as it aims a competitive strike at rival Microsoft Windows.
Still to Come:
WEDNESDAY: Earnings from Hovnanian
THURSDAY: May chain-store sales; Blagojevich trial begins; Fed's Lockhart, Hoenig speak; ADP employment report; weekly jobless claims; productivity; factory orders, ISM services index
FRIDAY: May jobs report; Fed's Lockhart speaks; Walmart shareholder meeting; Sprint's first 4G phone goes on sale
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