US STOCKS-Wall St rebounds on IBM, financials

                                
 * IBM tops Dow as profit, outlook boost stock price
                                
 * Financials rebound following Tuesday's sell-off
                                
 * Treasury nominee Geithner faces Senate grilling
                                
 * Dow up 3.5 pct, S&P up 4.4 pct, Nasdaq up 4.6 pct
                                
 * For up-to-the-minute market news, click [STXNEWS/US]
 (Updates to close)
                                
 By Chuck Mikolajczak
                                
 NEW YORK, Jan 21 (Reuters) - U.S. stocks jumped on
Wednesday, rebounding from a two-month low, after a
surprisingly healthy earnings report from IBM fueled optimism
that technology may fare better than other sectors during the
recession.
                                
 Financial stocks outperformed as well on the strength of
earnings surprises from Northern Trust <NTRS.O> and PNC
Financial Services <PNC.N>, helping the group reclaim some of
Tuesday's massive losses that dropped the financial sector to
a 14-year low.
                                
 The market shrugged off a brief sell-off after Treasury
Secretary nominee Timothy Geithner faced tough questioning at
his confirmation hearing before a Senate committee.
                                
 The day after earnings results from State Street alarmed
investors about losses in one of the safest parts of banking,
earnings from rival Northern Trust Corp <NTRS.O> on Wednesday
soothed investor concerns after its net income more than
doubled. The financial services company's shares shot up
nearly 31 percent to $57.51. For details see [ID:nN21470235]
                                
 PNC Financial Services Group Inc <PNC.N> also projected
lower loan losses from its purchase of National City Corp,
sending its shares soaring 37 percent to $30.16.[ID:nN21483128]
                                
 "People are excited because financials are valued so low
at this point. It's the mentality that they can't get any
lower, but they've proven time and time again that they can,"
said Jocelynn Drake, market analyst at Schaeffer's Investment
Research in Cincinnati, Ohio.
                                
 The Dow Jones industrial average <.DJI> gained 279.01
points, or 3.51 percent, to 8,228.10. The Standard & Poor's
500 Index <.SPX> rose 35.02 points, or 4.35 percent, to
840.24. The Nasdaq Composite Index <.IXIC> climbed 66.21
points, or 4.60 percent, to 1,507.07.
                                
 International Business Machines Corp <IBM.N> provided the
biggest lift to the Dow, jumping nearly 12 percent to $91.42
after the world's top technology services company posted a
quarterly profit and a 2009 profit outlook that surpassed Wall
Street's expectations. That burst of strength from IBM led
 investors to believe the Dow component can weather the global
economic downturn.  [ID:nN20268352].
                                
 Hearings on Geithner's appointment attracted the market's
attention for much of the day as he is seen as President
Barack Obama's point man in battling the economic crisis. As
the president of the Federal Reserve Bank of New York since
2003, Geithner is expected to hit the ground running if
confirmed as Treasury secretary.
                                
 A day after his historic inauguration, Obama met with his
economic advisers, who are working with the Democratic-led
Congress on an $825 billion fiscal stimulus package.
[ID:nN20421893].
                                
 The financial sector drove gains in the S&P 500 following
Tuesday's sharp sell-off, which was ignited by deepening fears
of insolvency among banks.
                                
 The broad KBW index of bank stocks <.BKX> and the S&P
financials index <.GSPF> both jumped 14.6 percent.
                                
 Bank of America <BAC.N> shares climbed 31 percent to $6.68
after Chief Executive Kenneth Lewis purchased 200,000 common
shares, four days after the company posted its largest
quarterly loss in 17 years. [ID:nN21492581]
                                
 JPMorgan Chase <JPM.N> ranked as the Dow's second-biggest
advancer, surging 25.1 percent to $22.63.
                                
 On the downside, Wal-Mart Stores Inc <WMT.N> was the
heaviest weight on the Dow after being downgraded to a
"neutral" rating by Credit Suisse. Shares of Wal-Mart, the
world's largest retailer and leading discount chain, slid 2.8
percent to $49.14.
                                
 Apple <AAPL.O> led the Nasdaq higher ahead of its
quarterly earnings after the closing bell, despite a report
that U.S. regulators were examining the company's disclosures
about Chief Executive Officer Steve Jobs' health problems to
ensure investors were not misled. [ID:nN21478108]. Apple's
stock rose 5.9 percent to $82.83.
                                
 Trading volume was active on the New York Stock Exchange,
with about 1.74 billion shares changing hands, above last
year's estimated daily average of roughly 1.49 billion, while
on Nasdaq, about 2.12 billion shares traded, below last year's
daily average of 2.28 billion.
                                
 Advancing stocks outnumbered declining ones on the NYSE by
a ratio of 4 to 1, while on the Nasdaq, about three stocks
rose for every one that fell.
  (Editing by Jan Paschal)