NEW YORK » Federal Reserve Chairman Ben Bernanke has given Wall Street a double dose of reassurance. Now it's President Barack Obama's turn.

Bernanke told Congress yesterday the recession might end this year, and that regulators aren't planning to nationalize banks. The news alleviated some of investors' worries about the economy and the banking industry, and lifted the Dow Jones industrial average and Standard & Poor's 500 index off their lowest levels since 1997.

And investors were hopeful that yesterday night, Obama would provide specifics about his plans to stabilize the financial system and further stimulate the economy.

Stocks remain on shaky ground, however. Bernanke may have helped stem the market's slide yesterday, but the market also found stability from temporary technical factors: bargain-hunting, the unwinding of short bets, and selling exhaustion after six straight down days for the S&P 500.

The continued focus on the stability of the financial system comes a day after the government moved closer to dramatically expanding its ownership stakes in the nation's banks, including Citigroup Inc. The U.S. Treasury Department, the Fed and other banking regulators said Monday they could convert the government's stock in the banks from preferred shares to common shares.

Two big drags on the Dow this year - Citigroup and Bank of America Corp. - regained ground yesterday. Citigroup rose 46 cents, or 22 percent, to $2.60, and BofA rose 82 cents, or 21 percent, to $4.73.

Another bank in the Dow, JPMorgan Chase & Co., rose $1.51, or 7.74 percent, to $21.02 after announcing late Monday it would slash its quarterly dividend to 5 cents from 38 cents in a move to save $5 billion a year.

The only loser in the Dow yesterday was Microsoft Corp., which dipped 4 cents to $17.17 after it reiterated its belief that the economic crisis will persist at least into the second half of 2009.

The Dow rose 236.16, or 3.3 percent, to 7,350.94. On Monday, the major indexes tumbled more than 3 percent, including the Dow, which fell 251 points and hit its lowest close since May 7, 1997.

Broader stock indicators also rebounded yesterday. The S&P 500 index rose 29.81, or 4 percent, to 773.14. On Monday, it logged its lowest finish since April 11, 1997.

The Nasdaq composite index rose 54.11, or 3.9 percent, yesterday to 1,441.83, while the Russell 2000 index of smaller companies rose 17.90, or 4.5 percent, to 412.48.

In his semiannual report to the Senate Banking Committee, Bernanke predicted the economy is likely to keep contracting in the first six months of 2009, but that “;there is a reasonable prospect”; the recession will end this year.

Bond prices fell yesterday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.80 percent from 2.76 percent late Monday. The yield on the three-month T-bill, considered one of the safest investments, was unchanged at 0.29 percent.

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

Light, sweet crude rose $1.52 to $39.96 per barrel on the New York Mercantile Exchange.