Stocks jump in early trading
Wall Street bounces after previous session's selloff. Banks in focus.
NEW YORK (CNNMoney.com) -- Stocks bounced Wednesday morning, rising after the previous day's battering, as investors continued to mull the outlook for the banking system while some of the industry's key executives prepare to testify before Congress.
Asian stocks ended lower Wednesday, and European stocks were mixed in morning trading.
Oil edged up 53 cents to $38.08 a barrel. The dollar slipped versus the euro and the yen but rose against the British pound.
U.S. stocks slumped Tuesday, with the Dow industrials ending at a 3-month low, as Treasury Secretary Tim Geithner's bank rescue plan failed to soothe investors. All three major gauges lost at least 4%.
"The investors wanted clarity," said Anthony Conroy, head trader at BNY ConvergEx Group. "They didn't get that, so I think that's why they started to sell."
"We need the government guys to stop talking on TV," said Todd Leone, head trader at Cowen & Co. "Nobody liked what Geithner said, obviously. The perception was not good."
Banks: The banks will be in focus again Wednesday as the heads of eight major institutions testify about the Treasury rescue plan before a House committee.
Industry leaders - including Bank of America's (BAC, Fortune 500) Ken Lewis, Citigroup's (C, Fortune 500) Vikram Pandit and JPMorgan Chase's (JPM, Fortune 500) Jamie Dimon - will face questions about executive pay and how their banks have spent their share of the first $350 billion in the rescue plan.
Stimulus: Senate and House conferees are expected to take up the task of reconciling the stimulus measures passed by the two houses. Proponents hope to get a final vote on a compromise measure completed in time so that President Obama can sign the bill into law on Presidents Day, next Monday.
Economy: The government reported a trade gap of $39.9 billion for December, down from a revised $41.6 billion the prior month. Economists surveyed by Briefing.com had expected the deficit to shrink to $35.5 billion.
Later this morning, the Energy Department releases its weekly oil inventory figures.
Company news: Applied Materials (AMAT, Fortune 500) cautioned late Tuesday that chipmakers will spend 50% less this year for its products. The company also posted a fiscal first-quarter loss of nearly $133 million and said it will cut 14% of its workforce, or about 2,000 jobs. Shares fell 1% Wednesday morning.