Stocks rebounded early Tuesday as global stock markets came back from a widespread pullback brought on by renewed concerns about credit.
Big names on Wall Street such as Citigroup Inc. and Merrill Lynch & Co. have stirred gloom on Wall Street of late by taking or warning of big write-downs on debt tied to faltering mortgages. The uncertainty about U.S. credit problems has spread to other markets as well.
Citi and Merrill, among others, have been bombarded by securities they hold that are tied to subprime loans, those made to borrowers with poor credit. A sharp pullback in housing prices has tripped up borrowers and sent mortgages defaults higher. That soured debt has come back to haunt banks.
While investors appeared willing to look past some unease about subprime debt on Tuesday, concern about inflation persists, with gold prices surging past $800. Gold has in recent sessions moved above the psychological benchmark; before its recent movement it hadn't traded above $800 since 1980.
In the first hour of trading, the Dow Jones industrial average rose 40.81, or 0.30 percent, to 13,584.21 after falling 51 points in an erratic session Monday.
Broader stock indicators also rose. The Standard & Poor's 500 index rose 7.11, or 0.47 percent, to 1,509.28, and the Nasdaq composite index rose 11.23, or 0.40 percent, to 2,806.41.
Bonds fell. The yield on the 10-year Treasury note, which moves opposite the price, rose to 4.37 percent from 4.34 percent late Monday. The dollar reached yet another record low against the euro Tuesday. The 13-nation currency rose to a high of $1.4569 in mid-afternoon trading before falling back slightly.
Light, sweet crude jumped $1.94 to $95.92 per barrel in premarket trading on the New York Mercantile Exchange.
In addition, Fed Chairman Ben Bernanke is scheduled to speak in San Antonio Tuesday afternoon. As always, investors will be watching for any clues about policymaker's reading of the economy. They're particularly anxious after the Fed indicated last week it might stop lowering rates. Investors are also awaiting his scheduled testimony Thursday before Congress' Joint Economic Committee.
Tech stocks could benefit from investor enthusiasm over Chinese e-commerce portal Alibaba.com. The stock nearly tripled in its debut on the Hong Kong stock market Tuesday. Some analysts dismissed the run-up as the work of speculators, however. The company, in which Yahoo Inc. is an investor, allows companies in China and overseas to trade with one another online. Alibaba raised $1.5 billion through its global offering of a 17 percent stake _ the biggest IPO by a Chinese Internet company. Yahoo fell 69 cents, or 2.2 percent, to $30.67.
With no major economic news due Tuesday, investors will be focused on corporate results.
Agricultural processor Archer Daniels Midland Co. said its fiscal first-quarter profit rose 9 percent as improved results at its oilseeds processing business offset higher corn prices. ADM rose $2.67, or 7.7 percent, to $37.19.
Molson Coors Brewing Co., one of the world's largest brewers, fell $1.09 to $55.49 after reporting its third-quarter earnings fell because of a charge for closing a Canadian brewery and weather in Britain that cut into sales.
Beazer Homes USA Inc. said it plans to book a charge in the fourth quarter and suspend its dividend to help cut costs. The homebuilder rose 2 cents to $9.54.
First Solar Inc. jumped $16.44, or 11.1 percent, to $164.54 after the solar-cell maker signed a long-term module supply agreement with a unit of Babcock & Brown and Ecostream Switzerland GmbH that is expected to generate sales of about $1 billion.
Advancing issues outnumbered decliners by more than 2 to 1 on the New York Stock Exchange, where volume came to 132.6 million shares.
The Russell 2000 index of smaller companies rose 2.92, or 0.37 percent, to 793.35.
Overseas, Japan's Nikkei stock average closed down 1.62 percent, while Hong Kong's Hang Seng index rose 1.71 percent a day after falling 5 percent. Britain's FTSE 100 rose 0.66 percent, Germany's DAX index rose 0.55 percent, and France's CAC-40 rose 0.68 percent.
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