U.S. Stocks Rise After Lawmakers Pick Over Bank Bailout

NEW YORK (MarketWatch) -- Stocks on Tuesday wavered in and out of positive terrain with investors in limbo with further hearings Wednesday on the Bush administration's $700 billion proposal to relieve banks of bad debt and bring back the troubled credit markets.

"Investors remain reluctant to stick their necks out too far, even as policy-makers meet to discuss the proposed bailout plan. A nagging fear of 'what ifs' is also weighing on sentiment," said Frederic Ruffy, options strategist at WhatsTrading.com.

After triple-digit rises and declines during the session, the Dow Jones Industrial Average was recently up 21.27 points at 11,036.96, with 16 of its 30 components posting late-session gains.

Technology companies led the Dow's minority rise, with Microsoft Corp. up 2.6% and Intel Corp. , ahead 3.6%.

Dow laggards included General Motors Corp. , down 5.6% and General Electric Co. , off 3.1%.

The S&P 500 Index gained 5.06 points to 1,212.15, with telecommunication services and financials fronting gains among the index's 10 industry groups.

Energy proved the only lagging sector as the end of the trading day neared.

The Nasdaq Composite Index added 15.03 points to 2,194.01.

Volume on the New York Stock Exchange came to 842 million, and decliners outpaced advancers more than 3 to 2. On the Nasdaq, 650 million shares changed hands, and decliners ran ahead of advancers 5 to 4.

Crude slips

In energy trading, oil futures slipped after soaring more than $16 in the previous session, with crude for November delivery closing at $106.61 a barrel on the New York Mercantile Exchange, down $2.76, or 2.5%, for the session. .

Gold futures fell sharply, with the contract for December delivery off $17.80 to end at $891.20 an ounce on Nymex. .

Treasury prices gained, sending yields lower, with the 2-year note yields off 7 basis points to 2.072%. .

The dollar pulled higher. The dollar index , which tracks the greenback against a trade-weighted basket of six major currencies, recently stood at 76.80 from 76.003 in North American trading late Monday. .

Paulson and Federal Reserve Chairman Ben Bernanke urged senators to quickly approve the plan to prop up the shell-shocked U.S. financial system, saying failure to do so would risk the stability of financial markets and the economy. .

Echoes of Iraq

Some critics likened the White House's hurried approach to the financial market crisis to its headlong plunge into the Iraq War. .

As Washington debates the proposal to fix the housing market's woes, the government reported U.S. home values fell 0.6% in July from June. .

Shares of Lennar Corp. fell 2.3%. The Miami-based builder reported restructurings and other actions contributed to a narrower third-quarter loss, and the company's chief executive called for further government action to help the industry.

International stocks were lower, with the Hang Seng Index losing 3.9% in Hong Kong. .

The pan-European Dow Jones Stoxx 600 index fell 1.9%. .

U.S. stocks tumbled on Monday and oil prices shot markedly higher, as investors fretted about the details of the plan designed to get banks lending to each other again and raise fresh capital. The temporary ban on short selling also helped to keep volumes on the low side as hedge funds sat on the sidelines.

By Kate Gibson