Wall Street bounced back on Wednesday following its worst day since early December after lawmakers reached a deal on a $789 billion stimulus package.

Today’s Markets

The Dow Jones Industrial Average jumped 50.65 points, or 0.64%, to 7939.53, the S&P 500 rose 6.57 points, or 0.79%, to 833.73 and the Nasdaq Composite picked up 5.77 points, or 0.38%, to 1530.50. The consumer-friendly FOX 50 added 3.71 points, or 0.60%, to 618.70.

The markets had another choppy day of trading, veering in and out of the red before ending modestly higher. 

“We’re no better off and no worse off than where we were at the end of November, though we’ve had a lot of excitement along the way,” said Paul Nolte, director of investments at Hinsdale Associates. “It’s going to take time for the stimulus package to work its way through the system. It’s a step in the right direction but there is not a silver bullet for this economy.”

Aside from the latest action in Washington, the markets were influenced by a number of corporate headlines, including a record annual loss from Credit Suisse (CS), a possible bankruptcy filing for Sirius XM Satellite Radio (SIRI) and plunging shares of BlackBerry maker Research in Motion (RIMM).

The choppy trading comes a day after the Dow plunged 382 points, its worst selloff since losing 680 points on Dec. 1. Those heavy losses were provoked by a lack of clarity from Treasury Secretary Timothy Geithner, who unveiled a multi-pronged financial rescue plan but failed to satisfy Wall Street’s desire for details about how banks will rid themselves of the toxic assets at the center of the credit crisis. 

“I think yesterday was an overreaction. There is a feeling that the stimulus should boost future growth. The more clarity we get, the better it is for the market,” said Anthony Conroy, head trader at BNY ConvergEx.

The Dow was led higher by financial giants Citigroup (C), Bank of America (BAC) and JPMorgan Chase (JPM), the biggest losers a day ago. Nearly half of the Dow's 30 components ended in the red, including Walt Disney (DIS) and ExxonMobil (XOM).

Under pressure from RIM's cautious outlook, the Nasdaq Composite rebounded less than the broader market as tech stocks like Nvidia (NVDA) and SanDisk (SNDK) fell sharply. 

Congressional leaders slashed more than $50 billion from the economic stimulus package in an effort to have the legislation on President Barack Obama's desk ahead of his Monday deadline. A vote in the House on the final measure could come as early as Thursday. 

The compromise bill includes about $150 billion worth of infrastructure projects and devotes more than one-third of its value to middle-class tax cuts, leaders said. Congressional sources said the compromise deal removed tax credits for home and car buyers. 

In the commodity markets, crude oil futures fell to three-week lows after the government said oil inventories jumped by a greater-than-expected 5 million barrels last week, underscoring weakening demand. Falling for the fourth-straight day, crude settled at $35.94, down $1.61, or 4.29%, on the day. On the other hand, gold prices jumped $30.10, or 3.29%, to $943.80  -- the highest level since July 22. 

Corporate Movers

Sirius XM Satellite Radio (SIRI) is considering filing for Chapter 11 bankruptcy protection but satellite mogul Charles Ergen has offered to restructure the company’s debt and inject several hundred million dollars of capital in exchange for control, the The Wall Street Journal reported. Ergen, who controls EchoStar (SATS) and DISH Network (DISH), doesn’t plan on buying out existing shareholders, the newspaper reported.

Research in Motion (RIMM) warned it sees fourth-quarter earnings toward the low end of its previous forecast even after the BlackBerry maker’s quarterly subscriptions likely jumped by a better-than-expected 20%. 

Chrysler LLC is in talks with banks about a debt-for-equity swap before Feb. 17, Dow Jones Newswires reported.

Live Nation’s (LYV) $2.5 billion all-stock merger with Ticketmaster (TKTM) will be investigated by the Justice Department to see if the deal violates antitrust laws. Several lawmakers have been sharply critical of the deal, urging Justice to block it.

Rio Tinto (RTP) entered into a $19 billion deal to sell convertible bonds and minority stakes in a collection of mining assets with rival Aluminum Corp. of China, or Chinalco, the Journal reported.

Credit Suisse (CS) posted a record annual loss and disclosed a steeper-than-expected fourth-quarter loss of $5.2 billion. However, the second-largest Swiss bank was cautiously optimistic about 2009.

Bank of America’s (BAC) Merrill Lynch “secretly” moved up the date of its 2008 bonuses, possibly to force taxpayers to fund them, New York Attorney General Andrew Cuomo said in a letter. Cuomo said he is investigating if the bonus payments violated statutes or if officials at the banks violated fiduciary duties.

Mead John Nutrition (MJN) rose sharply in its first appearance on the New York Stock Exchange as the Bristol Myers Squibb (BMY) unit became 2009’s first IPO.

Nike (NKE) warned it may cut up to 1,400 jobs, or 4% of its headcount, amid an ongoing business review.

Toll Brothers (TOL) suffered a steeper-than-expected 51% plunge in quarterly home-building revenue though the luxury home builder saw signs of a rebound last month.

Genzyme (GENZ) beat the Street with adjusted-earnings of $1.04 in the fourth quarter on in-line revenue of $1.17 billion. The biotech company sees weaker-than-expected 2009 earnings on in-line revenue.

3M (MMM) increased its dividend by 2% to 51 cents per share and the Dow component said its board signed off on an extension to the company’s $7 billion stock buyback plan.

Data Dump

The Commerce Department said the U.S. trade gap fell in December by 6% to $39.93 billion, the lowest level since February 2003. Economists expected an even steeper drop as crude oil prices fell sharply and the recession cut demand for exports.

Global Markets

European markets ended mixed as the Dow Jones Euro Stoxx 50 fell for the second straight day, ending at 2267.90, down 0.01% on the day, but London's FTSE 100 rose 0.50% to 4234.60 and Germany's DAX gained 0.54% to 4530.09.

In Asia, Hong Kong's Hang Seng plunged 2.46% to 13539.21 and Australia's ASX 200 fell 0.41% to 3474.40. Japan's Nikkei 225 was closed for a national holiday.