Stocks wobbled Tuesday as worries that sent stocks to 12-year lows on Monday persisted.
The Dow Jones Industrial Average resumed its ascent after a late-morning dip. This comes after a selloff Monday that sent the Dow to a sub-7,000 closefor the first time in 12 years.
The S&P 500 struggled to stay above the 700 mark.
Investors scooped up bargains at the open but then began to cash in their chips as Federal Reserve Chairman Ben Bernanke began to testify before the Senate Budget Committee.
Bernanke said that economic prospects remain uncertain and said
more action will be necessary
to jolt the economy out of this rut.
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.
Treasury Secretary Tim Geithner is testifying before a House panel today and investors hope he will shed light on the Obama administration's plans to shore up the financial system.
>> LIVE NOW: Watch Geithner's House testimony
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.
Citigroup , whose shares are heading into penny range after the government sharply increased its stake in the banking titan, and Bank of America held onto their gains but other bank stocks began to slide.
Shares of JPMorgan Chase turned lower, after an earlier gain spurred by a report that the company made $5 billion last year by trading over-the-counter fixed-income derivatives.
Regional banks were mixed: Wells Fargo advanced but PNC Financial and State Street declined.
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.
Investors kept a weary eye on the banking sector in Europe as shares of HSBCtook another hammering after the bank launched its deeply discounted rights issue Monday.
AIG shares soared 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.
This Week:
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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