Stocks Shed Losses as Bank Stocks Gain

Stocks turned slightly positive as investors warmed to bank stocks, a day before the White House will announce its plans to charge the industry fees related to the industry’s bailout and as Congress probes the financial system’s collapse.

Major indexes faced pressure most of the morning after energy prices fell on an inventory surge and concerns persisted over global growth. But the mood turned a bit positive as Wells Fargo , Bank of America and others headed higher. BofA earlier was the biggest drag on the Dow.

Energy shares also fell after a report showed a larger than expected surge in inventories.

Oil prices dropped again, falling below $80 a barrel for the first time in 10 days even as the dollar continued to fade.

Chevron was the biggest loser on the Dow 30, which lost an early pop as the market sought to rebound from a losing day Tuesday.

Resource companies also fell, with Southern Copper dropping more than 2.5 percent.

Kraft Foods stoked some investor enthusiasm as it raised its outlook for the second time in two months. Investors even scooped up shares of Alcoa , which led the market lower yesterday after issuing disappointing earnings.

The market fell Tuesday on concerns over earnings and whether monetary tightening in China would stall the global economic recovery.

The China worries seemed to abate somewhat but remained a lingering concern.

“We don’t expect the effects of the current tinkering to be overly disruptive or derail the recovery trend,” Tinconderoga Securities analyst John Stoltzfus wrote in a morning research note that acknowledged a “steep selloff” remains possible. “Likely a look in the rearview mirror sometime down the road will tell us that China’s actions … were sensible and ultimately prudent.”

Technology continued to be a sore spot for the market, though, with chipmakers particularly weak and the Nasdaq lagging its counterparts. shares dropped for the second consecutive day as investors begin to take profits from an aggressive two-month rally in the group.

Google shares fell on news that it may pull out of China because of cyber attacks. Chinese search engine Baidu surged.

AstraZeneca was among the market’s big movers, rising after Credit Suisse upgraded the pharma leader to “neutral” from “underperform.”

Another snapshot of the economy comes at 2 pm New York time, when the Federal Reserve releases its Beige Book, the region by region assessment of economic conditions.

At the same time, the Treasury is out with the December budget statement, expected to show a deficit of $91 billion for the month, compared with a shortfall of $51.8 billion in December of 2008.

Sony gained as it postpones the launch of videogame Gran Turismo 5, citing production issues for the latest in that hot-selling videogame line.