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Stocks Rebound Amid Bargain Hunting

Stocks rose sharply Tuesday as investors scooped up beaten-down stocks after the prior session's selloff that saw the Dow give back 700 points.

The Dow Jones Industrial Average was up 50-75 points in the first hour or so of trading, then jumped another 100 points after Ford CEO Alan Mulally said his company has enough money to get through 2009 and may not need help from the government.

But analysts said the bounce was likely to be temporary and that stocks may test the lows reached in October again.

"No doubt we can continue to have a short-term rally, but… if we look at the global economy, contraction is on the way, corporate earnings are coming down sharply," independent strategist Bob McKee said on CNBC.

Meanwhile, Ford reported its U.S. sales were down 31 percent last month, in-line with expectations, while General Motors saw its sales tumble 41 percent, more than expected.

Sales results from other auto makers will be sprinkled throughout the day. U.S. auto makers are expected to post declines of at least 30 percent, hurt further by speculation that one or more could go bankrupt. But even foreign auto makers like Toyota Motor and Honda are expected to feel the pinch, reporting declines of at least 25 percent.

The Big Three auto makers — GM,Ford and Chrysler — will submit their restructuring plansto Congress todayin hopes of convincing Congress to bail them out.

Toyota said it will cut management bonuses by 10 percent, amid reports that it will halt production for two days at some plants at the end of this month.

President-elect Barack Obama told the nation's governor's that they will play an integral role in designing an economic-recovery plan.

Of course Treasury Secretary Paulson is speaking in the next hour, so stay tuned.

Bank stocks were some of the biggest gainers on the Dow as several announced job cuts to help them weather the crisis.

JPMorgan Chase said late on Monday it will eliminate about 9,200 jobs at the former Washington Mutual, which on Sept. 25 became the largest U.S. bank to fail, while Bank of America is expected to cut 10,000 investment banking jobs when it integrates the businesses of Merrill Lynch , CNBC has learned.

Meanwhile, Goldman Sachsfaces a possible $2 billion loss for the fourth quarter — its first ever as a public company — according to a report in the Wall Street Journal. Goldman shares continued to slide after tumbling nearly 17 percent on Monday.

CNBC parent General Electric was also one of the top gainers on the Dow after the conglomerate said it will maintain its 2009 dividendand pare down its finance arm, GE Capital.

Tech stocks rebounded after being among the hardest hit in Monday's selloff: Intel , Dell , eBay and GPS maker Garmin all rose sharply.

But hand-held makers Research In Motion and Palm tumbled after both stocks were downgraded by analysts. Palm missed analysts' estimates by a long shot in its preliminary second-quarter results and said it would slash its work force.

Yahoo shares jumped following news that former AOL chief Jonathan Miller is trying to raise money to buy all or part of the Internet portal.

As the holiday-shopping season gets into full swing this week, it was bad news for another retailer: Searsposted a wider-than-expected lossand announced more store closings. Same-store sales were down 11 percent at Sears stores and 7 percent at Kmart stores.

Office-supply retailer Staples reported a 43 percent drop in quarterly profit due to restructuring charges, the acquisition of Corporate Expense and a lawsuit settlement. Excluding those charges the company earned 42 cents a share, narrowly beating analyst estimates.

>> Check in on how the holiday season is shaping up at CNBC's Holiday Central.

Beazer Homesreported its quarterly loss more than tripledas revenue plunged and income taxes ballooned.

Delta Airlines hinted that more job cuts may be on the way as it works to pare back capacity.

United parent UAL said it would be willing to cut capacity but doesn't think such a step will be necessary.

This Week:

TUESDAY: Paulson discusses US-China relations; Auto sales; Auto hearings; Fed's Plosser speaks; FDIC's Sheila Bair speaks
WEDNESDAY: Weekly mortgage applications; Challenger, ADP jobs reports; ISM services report; weekly crude inventories; Fed's Lacker speaks; Fed beige book
THURSDAY: Chain-store sales; BOE, ECB rate decisions; weekly jobless claims; factory orders; natural-gas inventories; Earnings from Toll Brothers
FRIDAY: November jobs report; consumer credit

Send comments to cindy.perman@nbcuni.com.