An unexpected uptick in consumer confidence gave bargain hunters a reason to take advantage of yesterday's sell-off. The Dow surged 110 points to 11,241 while Nasdaq soared 40 points to 2303.

On the upside

The chairman and chief executive of French telecommunications giant Alcatel-Lucent (NYSE: ALU) both stepped down giving in to demand by shareholders for management change after six consecutive quarters of losses.

A drop in oil prices lifted the airline sector with shares of United Airlines (Nasdaq: UAUA) and AMR (NYSE: AMR) rising.

United States Steel (NYSE: X) posted profits that more than doubled to beat expectations due to strong demand and record prices.

On the downside

Merrill Lynch (NYSE: MER) announced plans to issue $8.5 billion in new shares and to sell of more than $30 billion in collateralized debt obligations.

Ball bearings maker Kaydon Corp. (NYSE: KDN) posted profits that beat exstimates, but lowered its full-year outlook.

Zoran (Nasdaq: ZRAN) which makes chips used in DVD players lowered its 3rd quarter revenue targets citing weak consumer spending.

In the broad market, advancing issues outpaced decliners by a margin of nearly 3 to 1 on both the NYSE and Nasdaq. The Russell 2000 which tracks small cap stocks leaped 10 points to 707.