However, analysts were still very cautious, noting that it's common for the stock market to blip up after a prolonged period of selling. They also noted that investors are well aware of the many problems facing the economy.

"Right now we're not getting encouraging fundamental data," said Alan Gayle, senior investment strategist at RidgeWorth Investments. "I think it's too soon to call a bottom in this market despite yesterday's strong performance."

There is little economic and corporate news expected Wednesday. Investors are likely to keep a close watch on financial stocks, especially as they await details on the government's plan for dealing with banks' toxic assets. Treasury Secretary Timothy Geithner said Tuesday that the Obama administration will unveil the plan within the next couple of weeks.

During an interview aired Tuesday night on "The Charlie Rose Show," Geithner said the plan the administration has put together will provide financing to private investors who are willing to buy banks' bad assets. He predicted the plan will succeed but will take time to work.

Financial stocks led Tuesday's rally, which saw the Dow Jones industrials surge nearly 380 points. Word of Citigroup's improved performance was a welcome reprieve from the flood of bad news that has slammed bank stocks and the broader market for months. And it provided investors with a boost of optimism that the first quarter might not be as bad as expected.

But Tuesday's rally was also fed by short covering, which occurs when investors need to buy stock to replace shares that were borrowed and then sold on expectations of a market decline.

Ahead of the market's open Wednesday, Dow Jones industrial average futures rose 60, or 0.9 percent, to 6,947. Standard & Poor's 500 index futures added 9.60, or 1.3 percent, to 725.60, while Nasdaq 100 index futures rose 15.25, or 1.4 percent, to 1,121.25.

The big question Wednesday is whether the market can maintain its momentum throughout the day. If the Dow is able to extend its gains, it would mark the index's first back-to-back advance since early February. But the market has stumbled recently in similar situations. The Dow had gained 200 points in a single session five times this year before Tuesday's performance, only to lose ground the very next day.

"It's rare to see large gains follow large gains," Gayle said. "What we would find encouraging is getting a bounce that holds. That would suggest that we may be at the beginning of a rebound."

In corporate news , Staples Inc. said its fiscal fourth-quarter profit dropped 14 percent amid a number of charges related to an acquisition. The office products retailer reported a 16 percent jump in sales. But both sales and adjusted earnings missed Wall Street expectations. In premarket trading, shares fell 74 cents to $15.

Financial shares pointed higher ahead of the market's open. Citigroup added 13 cents to $1.58, while Bank of America Corp. added 43 cents to $5.22.

Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was 3.02 percent, up from 3 percent late Tuesday. The yield on the three-month T-bill, considered one of the safest investments, slipped to 0.23 percent from 0.24 percent late Tuesday.

The dollar was mixed against other major currencies, while gold prices rose.

Light, sweet crude fell 80 cents to $44.91 a barrel in electronic premarket trading on the New York Mercantile Exchange.

Overseas, Japan's Nikkei stock average jumped 4.55 percent and Hong Kong's Hang Seng rose 2.02 percent. In afternoon trading, Britain's FTSE 100 fell 0.42 percent, Germany's DAX index rose 1.35 percent, and France's CAC-40 rose 1.14 percent.

 SOURCE: Yahoo Finance