Investors held out hope that U.S. Treasury Secretary Timothy Geithner would shed light on plans to shore up the financial system a day after Wall Street slid to a 12-year low.
His testimony will follow an appearance on Capitol Hill by Federal Reserve Chairman Ben Bernanke, due to testify on the economy at 10 a.m..
Among financials, shares of Bank of America climbed 6.6 percent to $3.87, while JP Morgan rose 1.9 percent to $21.56.
In the pharmaceutical sector shares of Merck & Co rose 2.3 percent to $23.96, making the stock one of the top boosts to the Dow.
When you reach certain levels of oversold you're going to get a bounce. and when the bounce is beginning you don't know if it is anything more than a short-covering bounce, said Tom Alexander, head of Alexander Trading in Savannah, Georgia.
Bernanke is due to testify at 10 a.m. while Geithner's testimony on U.S. President Barack Obama's budget will start at 12.30 p.m.. Pending home sales data are due at 10 a.m..
The Dow Jones industrial average <.DJI> was up 48.99 points, or 0.72 percent, at 6,812.28. The Standard & Poor's 500 Index <.SPX> was up 7.13 points, or 1.02 percent, at 707.95. The Nasdaq Composite Index <.IXIC> was up 13.74 points, or 1.04 percent, at 1,336.59.
(Additional reporting by Rodrigo Campos, Editing by James Dalgleish) Keywords: MARKETS STOCKS