NEW YORK (CNNMoney.com) -- Stocks bounced back Tuesday, erasing losses at the end of a tough session, after oil prices fell amid hopes for a cease-fire in the Mideast.

The Dow Jones Industrial average (up 51.87 to 10,799.23, Charts) added 0.5 percent, while the broader Standard & Poor's 500 (up 2.37 to 1,236.86, Charts) index added about 0.2 percent.

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The tech-heavy Nasdaq composite (up 5.50 to 2,043.22, Charts) index added 0.3 percent.

Stocks had slipped throughout the mid-afternoon, but managed a late-session recovery when oil reversed course. The drop in oil prices seemed to spark a rally in some of the recently beaten-down shares.

Treasury bond prices slipped, boosting the corresponding yields, and the dollar gained versus other major gauges. Oil and gold prices fell.

After the close, IBM (Charts) reported quarterly earnings that rose from a year ago and topped estimates, on revenue that rose from a year ago and met estimates, sending shares over 2 percent higher in extended-hours trading.

Also after the close, Yahoo! (up $0.40 to $32.24, Charts) reported quarterly earnings that rose from a year ago and met estimates on sales that rose from a year ago, but missed forecasts. The company also issued a range for third-quarter revenue that sets the midpoint below analysts' average forecast, sending stocks lower after the bell.

Companies reporting quarterly earnings Wednesday morning include Bank of America (Charts) and JP Morgan Chase (Charts).

However, of greater focus will be the June read on consumer prices, following Tuesday's read on wholesale prices.

In addition, Fed Chairman Ben Bernanke will begin the first day of his two-day semi annual Congressional testimony on the economy, and investors will be hoping that he has something new to say about the direction of interest rates, although that isn't likely.

As of 5:30 p.m. ET, Nasdaq and S&P futures pointed to a weaker open, when fair value is taken into account.

After a brief pop at the open, stocks soon turned lower, slumping through the early afternoon on a mix of worries, including rising oil prices, escalating violence between Israel and Hezbollah militants in Lebanon, inflation worries and concerns about corporate profits.

Tuesday's declines were an extension of the market's recent woes, with stocks falling for three sessions and trading flat Monday.

But the afternoon brought talk about trying to get a cease-fire in the Middle East after the latest escalation of violence. This brought oil down and gave the market a lift, said James Awad, president at Awad Asset Management.

Still, he added, investors remain cautious. "I don't think people want to do much before the inflation report tomorrow and Bernanke's testimony before Congress."

Nonetheless, the overriding concern for investors is what's going on in the Middle East and that clouds our vision in terms of what's going on with economic or corporate news," said Art Hogan, chief market analyst at Jefferies & Co. "Investors are going to be hard-pressed to make a decision about stocks until there's some clarity on the Middle East and oil prices."

U.S. light crude oil for August delivery fell $1.76 to settle at $73.54 a barrel on the New York Mercantile Exchange after rising as high as $76.55 earlier in the session.

Oil prices slumped more than 2 percent Monday after closing at a record $77.03 Friday and briefly trading at $78.40 during that session.

Treasury prices slumped. The yield on the benchmark 10-year note fell 16/32, or $5 on a $1,000 note, to yield 5.13 percent, up from around 5.06 percent late Monday.

The dollar mostly gained against other major currencies as investors pulled money out of stocks and put it to work elsewhere.

Dow components Coca-Cola, United Technologies and Johnson & Johnson all reported quarterly earnings that rose from a year earlier and beat estimates.

Coca-Cola (up $0.85 to $43.55, Charts) shares gained 2 percent. United Technologies (up $0.92 to $58.88, Charts) added 1.6 percent.

But J&J (down $0.31 to $60.60, Charts) shares fell 0.5 percent, as investors took a 'sell-the-news' approach.

Merrill Lynch (down $0.77 to $67.50, Charts) also reported quarterly earnings that rose from a year earlier and beat estimates, but its stock fell over 1 percent on worries that the recent difficult market conditions will hurt the firm's performance in the current quarter.

TD Ameritrade (up $1.05 to $14.69, Charts) reported sharply higher quarterly earnings and revenue Tuesday morning. Shares of the online brokerage gained 7.7 percent on the Nasdaq composite.

Other Nasdaq gainers included Oracle (up $0.30 to $14.72, Charts), Microsoft (up $0.26 to $22.74, Charts) and JDS Uniphase (up $0.15 to $2.20, Charts).

Intel (up $0.37 to $18.21, Charts) gained 2 percent after brokerage Caris & Co. upgraded the stock to "buy" from "above average," according to Briefing.com.

Fellow Dow stocks Honeywell (up $0.78 to $37.54, Charts) and Walt Disney (up $0.50 to $29.10, Charts) rose too.

The retail sector suffered a number of setbacks.

Target (down $2.02 to $45.53, Charts) slipped 4.3 percent after lowering its July sales forecast late Monday.

Following the news, brokerage A.G. Edwards cut Target and a number of other retailers, saying the warning could suggest consumer spending is starting to slow in response to rising energy prices and a slower housing market.

The brokerage downgraded Best Buy (down $1.73 to $44.10, Charts), J.C. Penny (down $2.29 to $63.37, Charts) and Abercrombie & Fitch (down $2.56 to $50.95, Charts). All three stocks fell.

COMEX gold for August delivery slumped $22.40 to $629.50 an ounce, after rallying for the last few days.

The decline in the commodity price sparked a big selloff in the underlying stocks, with the Amex Gold Bugs (down $4.93 to $323.12, Charts) index losing 1.5 percent.

Silver slumped too, sending the iShares Silver Trust (down $3.02 to $105.95, Charts) down 2.8 percent.

Home building stocks slumped on signs of rising inflation. Of the stocks that make up the Philadelphia Housing (Charts) sector index, all 20 were in the red, including Toll Brothers (down $0.72 to $22.67, Charts), which fell almost 5 percent.

In other news, prices at the wholesale level rose more than expected in June, and more than they rose in May, according to a government report. Yet June prices excluding volatile food and energy - the report's key inflation indicator - rose in line with estimates and less than in May.

Market breadth was negative. On the New York Stock Exchange, losers beat winners nearly two to one on volume of 1.38 billion shares. On the Nasdaq, advancers topped decliners two to one, on volume of 1.66 billion shares.

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