(Updates with market extending gains)
NEW YORK, Sept 23 (Reuters) - U.S. stocks rose on Tuesday as shares of technology bellwethers, including Microsoft Corp (MSFT.O: Quote, Profile, Research, Stock Buzz) , jumped on hopes that the proposed $700 billion financial sector bailout would help loosen up lending and boost business and consumer spending.
Even so, investors were cautious and trading was choppy as the debate over the measure to mop up bad mortgage debts from the banks' balance sheets intensified before Congress in Washington.
The Dow Jones industrial average .DJI rose 59.26 points, or 0.54 percent, to 11,074.95. The Standard & Poor's 500 Index .SPX rose 7.41 points, or 0.61 percent, to 1,214.50. The Nasdaq Composite Index .IXIC climbed 15.36 points, or 0.70 percent, to 2,194.34.
In testimony to be delivered to a Senate committee, a copy of which was obtained by Reuters, Federal Reserve Chairman Ben Bernanke said, "Action by Congress is urgently required to stabilize the situation and avert what could otherwise be very serious consequences for our financial markets and our economy."
Shares of Microsoft, a Dow component, jumped nearly 2 percent to $25.83 on Nasdaq. The software maker on Monday announced plans of a $40 billion shares repurchase and raised its quarterly dividend.
Led by Treasury Secretary Henry Paulson, officials are working on a solution to mop up hundreds of billions of dollars worth of bad mortgage debt on the books of financial institutions.
Paulson, will be joined by Bernanke, Securities and Exchange Commission Chairman Christopher Cox and James Lockhart, director of the Federal Housing Finance Agency, in testifying before the Senate Banking Committee. (Editing by Kenneth Barry)
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