U.S. stocks rebounded during Tuesday mid-day trading following news that Abu Dhabi Investment Authority's would invest $7.5 billion in Citigroup Inc, raising investor confidence in the bank.

Citigroup, the largest U.S. bank, has suffered severe losses amid an ongoing crisis in the mortgage market. The bank's shares recovered from their first 10 percent drop in four years. The banking industry has been unstable in recent months as defaults on home loans have risen, causing some mortgage-backed securities to become valueless.

Sheikh Ahmed Bin Zayed Al Nahayan, Managing Director of ADIA said, Citi possesses a unique position in the financial markets throughout the world. We see in Citi a highly respected company with a premier brand and with tremendous opportunities for growth. This investment reflects our confidence in Citi's potential to build shareholder value.

Citigroup shares rose 44 cents, or 1.48 percent, to $30.24

A report released from the Conference Board said that its Consumer Confidence Index stumbled to its lowest point since October 2005. Since November, the index dropped to 87.3 points, down almost 8 points from the revised 95.2 during October — and below analyst expectations of 91.5.

The Dow rose 235.25, or 1.85 percent, to 12,978.69 as of 1:13 p.m. in New York. The Standard & Poor's 500 Index added 19.41 or 1.38 percent, to 1,426.63. The Nasdaq Composite Index rallied 39.45, or 1.55 percent, to 2,580.44