Stocks rebound as investors cheer banks

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NEW YORK (CNNMoney) Stocks rebounded a bit Tuesday as investors cheered results from some of the nation's largest financial institutions.

The Dow, S&P 500, and Nasdaq all moved slightly higher in morning trading. So was CNNMoney's Tech 30, led by a more than 3% gain in Intel (INTC, Fortune 500) following positive analyst reports about the chip giant.

After a sharp sell-off Monday, investors turned to bank earnings to get a sense of the economy's health.

JPMorgan Chase (JPM, Fortune 500) posted a fourth-quarter profit of $5.3 billion, including a $1.1 billion write-off for legal expenses. But earnings topped expectations. Shares of JPMorgan rose on the news.

The bank has settled numerous lawsuits in the past year, including over its behavior in the run-up to the mortgage crisis and for turning a blind eye to Ponzi schemer Bernard Madoff.

Wells Fargo (WFC, Fortune 500) also released earnings that slightly beat estimates, though it reported a big drop in mortgage activity. Shares were down early in the trading session.

This is just the beginning. Investors are readying themselves for a slew of quarterly earnings announcements over the coming weeks. Four other big banks are due to report their results later this week: Bank of America (BAC, Fortune 500), Citigroup (C, Fortune 500), Goldman Sachs (GS, Fortune 500) and Morgan Stanley (MS, Fortune 500).

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Investors have been nervous that earnings may not be strong enough to justify higher stock prices. Mike van Dulken, head of research at Accendo Markets noted that a new report from Goldman Sachs said valuations for the stocks in the S&P 500 were lofty by almost any measure and that further gains may be difficult to achieve.

And after a tepid December jobs report, investors are looking for further signs of strength in the economy.

Retail sales for December came in slightly better than expected, as retailers offered big promotions due to a shortened holiday season.

What's moving: Shares of CNNMoney Tech 30 component Microsoft (MSFT, Fortune 500)were up modestly despite a downgrade from Citigroup. Wall Street has become increasingly anxious over the tech giant's search for! a successor.

Google (GOOG, Fortune 500), another member of the Tech 30, moved higher after the search engine announced Monday afternoon that it was buying connected device maker Nest Labs for $3.2 billion.

Also on Monday, Charter Communications (CHTR, Fortune 500) said it had formally proposed acquiring Time Warner Cable (TWC, Fortune 500). Time Warner Cable flatly rejected the offer. Shares of both companies were up in early trading.

Shares of GameStop (GME, Fortune 500)tanked 19% after the video game retailer reported weak holiday season sales.

European markets were mostly lower in morning trading, while Asian markets ended mixed.