Stocks bounce back after steep selloff

Wall Street rebounded Tuesday, regaining some of the ground lost in the previous session’s huge drop, as the potential for a bailout of the beleaguered auto industry helped calm investors. The Dow Jones industrials rose more than 225 points, regaining a third of Monday’s nearly 680-point plunge.

Investors, already cautiously returning to the market following Monday’s steep decline, received some reassuring words from Ford CEO Alan Mulally, who said his company has enough cash to make it through 2009 and might not need government help. Mulally’s comments, in an interview with The Associated Press, came as Ford, General Motors Corp. and Chrysler LLC returned to Washington to submit to Congress plans for remaking themselves; lawmakers demanded those plans before considering whether to give the automakers $25 billion in government support.

Analysts said investors found the prospect of a bailout heartening, but that stocks were also rising because of the market’s now-familiar pattern of bouncing higher after a steep drop.

“It looks like the automakers are closer to a bailout, but it is hard to attribute these kind of market moves to news events,” said Brian Gendreau, investment strategist for ING Investment Management. “You can speculate to death what drives the markets, but this market is going to be full of volatility.”