U.S. stocks rebounded in early trading Tuesday as bargain hunting emerged after the previous session's steep sell-off.

Shares plunged with all the major indexes losing more than 3 percent Monday. Dow Jones and Standard & Poor's 500 index fell to the lowest closing since 1997.

Stocks went moderately higher Tuesday morning as investors waited for Federal Reserve Chairman Ben Bernanke's testimony on Capitol Hill. He was expected to address such issues as how the government plans to help banks remove bad assets.

In economic data, the S&P/Case Shiller home price composite index of 20 metropolitan areas plummeted 2.5 percent in December month on month, compared with a 2.3 percent decline in the previous period, S&P said in a statement.

In corporate earnings, Home Depot Inc., the largest home improvement retailer, beat analysts' expectations in the fourth quarter after cutting costs by closing a unit and holding down inventory.

Target Corp. reported that its fourth-quarter net income dropped 41 percent due to weaker-than-expected sales amid "unprecedented economic conditions."

The Dow Jones rose 71.44, or 1.00 percent, to 7,186.22. Broader indexes also moved higher. The S&P's 500 index climbed 9.27, or 1.25 percent, to 752.60; and the Nasdaq composite index gained 21.86, or 1.58 percent, to 1,409.58.

Source: Xinhua