Major stock indexes rose Monday as momentum shifted in favor of the reappointment of Federal Reserve Chairman Ben Bernanke.
Investors want a sign that Bernanke will remain in control of the Fed because that would make a big shift in interest rate policy far less likely.
Key senators including Max Baucus of Montana and Dianne Feinstein of California said Monday they would support Bernanke's confirmation, and presidential adviser David Axelrod said Bernanke has enough votes to be confirmed. Last week several senators expressed doubt about Bernanke's reappointment, which had seemed assured, contributing to a sharp drop in the market.
The Dow Jones industrial average rose 24 points after losing 552 points over the previous three days. The Dow skidded from Wednesday to Friday of last week as President Barack Obama stepped up his campaign to tighten oversight of banks and on worries about Bernanke's tenure.
Bernanke's term expires on Sunday, and the Senate is expected to vote on his reappointment this week.
Bernanke was a key player in guiding the nation through the worst financial crisis since the 1930s, and has pledged to keep interest rates low to stimulate the economy. That has helped boost the stock and bond markets while also providing a steady supply of cheap funding to banks.
Many traders don't want to see a change because that would bring another set of unknowns for a market already burdened by uncertainty about the economy.
Russell Croft, portfolio manager at Croft Leominster Investment Management in Baltimore, said questions about what will happen with Bernanke as well as bank regulation and possible changes to health care have brought concerns that Washington will spoil a recovery.
"Anytime you get the political haranguing going on — worries about the Fed chief or whatever — it's obviously going to spook the markets," Croft said.
Technology shares could get a boost Tuesday from Apple Inc., which said after the closing bell that its profit jumped nearly 50 percent for the final three months of 2009 as it sold more iPhone devices.
The Dow rose 23.88, or 0.2 percent, to 10,196.86 after being up as much as 84 points. The fluctuations were modest, however, after a five straight days in which the Dow moved by more than 100 points.
The Standard & Poor's 500 index rose 5.02, or 0.5 percent, to 1,096.78, while the Nasdaq composite index rose 5.51, or 0.3 percent, to 2,210.80.
Bond prices fell, pushing yields higher. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.64 percent from 3.61 percent late Friday.
The questions about Bernanke's reappointment came as Fed policymakers are set to gather for the first meeting of the year on interest-rate policy. The two-day meeting starts Tuesday. The Fed is expected to hold rates at record lows, so investors will be examining the accompanying statement from the Fed for clues about when the central bank might begin to raise rates.
Obama also will give his first State of the Union address Wednesday.
Investors will get a rush of earnings and economic reports during the week to help determine how the economy is faring.
Most earnings have topped analysts' expectations, but unlike in recent quarters, that has not helped send stocks higher. Traders are paying more attention to specifics within earnings reports, such as revenue growth, and forecasts rather than seizing on a better-than-expected profit as a reason to buy shares.
Dozens of companies will report earnings throughout the week, including Amazon Inc., AT&T Inc. and Johnson & Johnson. Apple rose $5.32, or 2.7 percent, to 203.07. The stock was showing little direction in after-hours electronic trading.
Alan Lancz, money manager at Alan B. Lancz & Associates in Toledo, Ohio, said questions about Bernanke's future and concerns about increased regulation of banks added to a list of uncertainties investors are already facing.
Financial stocks have led the market's 10-month advance, so a shift in what they're worth could destabilize the market, he said.
"You really don't know what you're buying when you buy a Goldman Sachs now," Lancz said, referring to Goldman Sachs Group Inc., which is one of the big banks that could face a shift in government rules.
In other trading, the dollar was mixed against other major currencies, while gold rose.
Crude oil rose 72 cents to $75.26 per barrel on the New York Mercantile Exchange.
Three stocks rose for every two that fell on the New York Stock Exchange, where volume came to 1.1 billion shares, compared with 1.5 billion Friday.
The Russell 2000 index of smaller companies rose 0.99, or 0.2 percent, to 618.11.
Britain's FTSE 100 fell 0.8 percent, Germany's DAX index fell 1.1 percent and France's CAC-40 lost 1 percent. Japan's Nikkei stock average fell 0.7 percent.