US Stocks Open Modestly Higher

Stocks rose modestly on Tuesday after tumbling to their worst levels in more than a decade.
The Dow Jones Industrial Average was recently higher by about 60 points at 6,823, helped by sharp gains in its banking components and a 5.3% jump in shares of Alcoa. The S&P 500 gained 1.2% amid an across-the-board climb for all its sectors, with energy and basic materials recording gains of around 2%. The Nasdaq Composite Index rose 1.1%.
Stocks were routed world-wide on Monday after American International Group reported the worst-ever quarterly loss in U.S. corporate history and after HSBC Holdings said it would issue nearly $18 billion of discounted stock. The Dow Jones Industrial Average, closing at its worst levels since April 1997, dropped 299 points and the S&P 500 fell 34 points to its worst finish since 1996.
Strategists at Deutsche Bank say they now think the market is looking cheap. "We can finally make a case for equities being "cheap" for not only the first time in this crisis but for the first time in at least 14 years," they said. But, they added, that doesn't mean a rebound is in store. "Given the magnitude of this crisis we may have to eventually see very cheap levels before we bottom. So cheap is helpful but not a reason to suggest an imminent sustainable bounce."
Investors showed a modestly stronger appetite for risk. The dollar rose against the yen but declined against the euro on Tuesday. Gold futures fell about $15 an ounce, while crude-oil futures, which fell more than 10% Monday, climbed. Treasury prices declined.
Markets have been focused on Washington's efforts to halt the economic and financial crisis, with many traders saying the Obama administration's plans so far have been vague. The Wall Street Journal reported that the administration is considering creating multiple investment funds to purchase the bad loans and other distressed assets that lie at its heart.

Also Tuesday, the Treasury Department and Federal Reserve launched a highly anticipated lending facility aimed at generating up to $1 trillion in consumer and small business loans.
The Term Asset-Backed Securities Loan Facility, referred to as the TALF, is scheduled to begin disbursing funds March 25. It will make loans to purchasers of AAA-rated securities backed by new auto, credit card, student and Small Business Administration guaranteed loans.
Financial stocks, which have led the market downward, were modestly higher. Citigroup gained 4.2% and Bank of America advanced 5.2%.
Looking ahead Tuesday, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner will testify on the budget to separate Senate and House committees. Data on pending home sales for January will be released. Also, automakers will report monthly sales.
Edmunds.com forecasts sales declined 41.4% industry-wide last month. Most Wall Street analysts believe the seasonally adjusted annual rate of sales to have fallen to the low nine-million range, down from 9.6 million last month, which marked a 26-year low. Sales for General Motors, Ford Motor and Chrysler all are seen dropping by over 40%.
Overseas, Asia stocks fell but closed off their worst levels, with the Nikkei 225 down 0.7%. Europe stocks initially rose but quickly soured, with the FTSE 100 recently falling 1% in London.