Stocks Wobble as Bernanke Speaks; ING Surges

Stocks rose more than 1 percent out of the gate Monday as investors snapped up some bargains after Friday's selloff.

Offering investors something to chew on, Federal Reserve Chairman Ben Bernanke said that we may need a second government package to stabilize the economy in prepared remarks before the House Budget Committee.

The Dow Jones Industrial Average shot up at the open, peaking around 10 a.m. and wobbling as Bernanke spoke.

At 11:30 a.m. ET, Treasury Secretary Hank Paulson will speak, offering details of the application process for the capital-purchase program.

This is the start of an earnings-packed week, offering investors a chance to dig down into corporate numbers and see exactly how companies are doing.

It comes after a selloff on Friday, which saw the Dow shed more than 120 points. But gains earlier in the week propelled stocks to their best week in more than five years. Last week was one of the most volatile we've seen in the market in some time, with the CBOE volatility index, widely considered the best gauge of fear in the market, setting a new record above 80.

Some investors took the soaring VIXand Warren Buffett's pitch to buy American stocksas signs that we may be near the bottom.

Offering stocks a boost was a drop in the cost of overnight lending rates between banks. The closely watched London Interbank Offer Rate, or Libor, slipped across the board, with the overnight rate dropping to 1.51 percent, while the 3-month rate declined to 4.06 percent.

And on the economic front, leading indicators rose for the first time in five months, climbing 0.3 percent in September. Economists had expected the gauge to slide 0.2 percent after a 0.9-percent drop in August.

The latest data "suggest that conditions in the nonfinancial economy are not falling apart," Ken Goldstein, the Conference Board's labor economist, said in a statement. "Data on hand reflect a contracting economy but not one in free fall."

American depositary shares of Dutch bank ING soared more than 10 percent after the bank received a $13.5 billion cash injection from the government.

(Anthony Chan, JP Morgan Private Wealth Management and Bob Andres, Portfolio Management Consultants, discuss the market outlook in the video).

Mattel posted a slightly higher third-quarter profit, helped by increased sales of some Fisher-Price and American Girl products.

But the company's posted net profit of $238.1 million, or 66 cents per share, missed analyst expectations of 71 cents a share. Last year Mattel earned $236.8 million, or 61 cents per share.

At the same time, competitor Hasbro , which makes Monopoly and Star Wars toys, beat estimates as it posted a net profit of $138.2 million, or 89 cents per share, in the fiscal third quarter, compared with a profit of $161.6 million or 95 cents per share a year earlier, when it reported a tax benefit of 17 cents a share.

Analysts had expected Hasbro to post a profit of 86 cents per share.

Energy prices gained, with crude oil up about $2 a barrel. Shares of ExxonMobil rose more than 1.5 percent premarket.

In merger and acquisition news, Exelon, the largest nuclear power operator in the United States, made an unsolicited offer to acquire NRG Energy for $6.2 billion in stock. The combined company would be the No. 1 U.S. power company, with enough electricity to serve nearly 45 million homes, Exelon said late on Sunday.

However, more signs that the downturn continues emerged.

Yahoo is expected to outline plans to cut expenses, which would include future job cuts, when it reports its quarterly earnings on Tuesday, according to various press reports.

Halliburton posted a quarterly net loss, because of an acquisition-related charge and costs from the settlement of a convertible senior notes premium. The third-quarter net loss was $21 million, or 2 cents a share, compared with a year-earlier profit of $727 million, or 79 cents a share.

And Merrill Lynch's chief executive said he expects emergency measures by U.S. and international authorities to unfreeze lending to succeed, but added that more pain awaited the financial sector.

Overseas, Asian stocks closed higher while in Europe stock markets were also in the green.

The Swedish government outlined a plan worth more than 1.5 trillion crowns ($205 billion) to support the country's financial institutions, a program that will include credit guarantees and a bail-out fund.

But there are signs that turmoil continues in the financial sector, with shares in French bank Societe Generale falling sharply following renewed speculation that France's second-biggest listed bank might need a capital increase to boost its solvency ratios.

SocGen shares fell as much as 11.6 percent to its lowest level since early 2003.

But some good news emerged from other sectors, with Ericsson posting stronger-than-expected third-quarter earnings, benefiting from heavy network traffic and emerging unscathed from the financial crisis.

This Week:

MONDAY: Leading indicators; Bernanke speaks at 10 a.m. ET; Paulson speaks at 11:30 a.m. ET; Earnings from American Express and Texas Instruments
TUESDAY: Fed's Stern speaks; Earnings from BlackRock, Caterpillar, Coach, DuPont, Pfizer, Schering-Plough, State Street, UnitedHealth and USBancorp
WEDNESDAY: Weekly mortgage applications; weekly oil inventories; Earnings from AT&T, Boeing, Boston Scientific, ConocoPhillips, GlaxoSmithKline, McDonald's, Merck, Northrop Grumman, Philip Morris, Wachovia, WellPoint, Wyeth, Amazon, Amgen, Pulte Homes, Sallie Mae
THURSDAY: Weekly jobless claims; weekly natural-gas inventories; Earnings from Altria, Bristol-Myers Squibb, DaimlerChrysler, Eli Lilly, Raytheon, SunTrust, Union Pacific, UPS, Xerox and Microsoft
FRIDAY: Existing-home sales; Earnings from LM Ericsson