Markets rebounded Tuesday as bargain-hunting investors stepped up to the plate late in the session. The S&P/TSX composite index eked out a gain of 1.19 points to close at 6,503.49 after spending most of the day in the red.

Stocks initially fell after U.S. consumer confidence showed an unexpectedly steep drop in January, falling to 64 from a downward revision of 78.8 in January, and hitting its lowest level since October 1993.

A 0.91% rise in the influential TSX financial services index helped consolidate Tuesday’s small gain. Bank of Montreal rose $1.17 to $42.60, after reporting a solid first quarter earnings. Potential merger partner Scotiabank added 44¢ to $52.15.

The TSX gold index was the big loser Tuesday, dropping 2.89%. Barrick Gold slipped 44¢ to $23.48 as gold bullion futures fell US$4 to US$352.60. Placer Dome fell 79¢ to $13.89.

The details in Ottawa’s new transport blueprint were being closely followed by investors in the companies likely to be most affected.

Air Canada shares rose 13¢ to $3.20; WestJet stock dropped 43ç to $15.81; CP Rail shares fell 33¢ to $30.45; CNR climbed 26¢ to $62.76; Bombardier was unchanged at $5.

The junior TSX Venture Exchange edged 7.22 points lower to 1,103.26.

In New York, stocks rebounded as investors picked bargains from shares beaten down by an early slide on global tensions and weak economic data.

The market’s tone improved as oil prices fell after the U.S. said it was ready to release oil from the nation’s emergency reserves, if necessary, to offset any disruption to Middle East supplies in the event of war with Iraq.

The blue-chip Dow Jones industrial average gained 51.26 points to close at 7,909.50, based on the. The broader S&P 500 index gained 5.99 points to 838.57. The tech-heavy Nasdaq composite index added 6.60 points to 1,328.98.

The Canadian dollar slipped back 0.12¢ Tuesday to close at US66.91¢.