Stocks rise even as European Central Bank fails to offer fresh stimulus - Winnipeg Free Press Stocks rise even as European Central Bank fails to offer fresh stimulus - Winnipeg Free Press

Wednesday, June 6, 2012

Stocks rise even as European Central Bank fails to offer fresh stimulus - Winnipeg Free Press

Stocks rise even as European Central Bank fails to offer fresh stimulus - Winnipeg Free Press
A shovel and a jackhammer stand near the Euro sculpture in front of the European Central Bank in Frankfurt, Germany, Wednesday, March 7, 2012. THE CANADIAN PRESS/AP, Michael Probst

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A shovel and a jackhammer stand near the Euro sculpture in front of the European Central Bank in Frankfurt, Germany, Wednesday, March 7, 2012. THE CANADIAN PRESS/AP, Michael Probst

TORONTO - A rally on the Toronto stock market extended to a second session Wednesday as traders continued to pick up stocks that have been beaten down amid concern about the potential global impact of the European Union's drawn-out debt crisis.

The S&P/TSX composite index jumped 125.69 points to close at 11,633.4 on top of a 172-point surge Tuesday. The index had been up as much as 179 points Wednesday morning but gains eroded as the gold sector turned sharply lower, even as bullion closed at a one-month high. The TSX Venture Exchange was up 17.07 points to 1,302.64.

Buyers moved in following a drop of almost two per cent last week that left the market down about 10 per cent from the highs of 2012 in late February.

"It’s a relief rally," said John Stephenson, portfolio manager at First Asset Funds.

"Many people have been sitting on the sidelines, waiting for an opportunity to get in. And hope springs eternal."

The Canadian dollar was up 0.95 of a cent to 97.29 cents US as traders waded into riskier assets such as equities, commodities and resource-based currencies.

Gains were also supported by the U.S. Federal Reserve’s latest regional survey on the economy.

The Fed’s so-called Beige Book found that the U.S. economy grew moderately in most regions of the country this spring and companies kept hiring. This was a hopeful sign after a spate of gloomy data released last week, including a huge miss in expectations for job creation during May.

New York's Dow Jones industrials surged 286.84 points to 12,414.79.

The Nasdaq composite index gained 66.61 points to 2,844.72 and the S&P 500 index was ahead 29.63 points to 1,315.13.

The rise also reflected rumours that Germany and European Union officials were moving quickly to find a way to rescue Spain’s hobbled banks.

Markets have been whipsawed over the last month by growing worries about the eurozone debt crisis, including the possibility that Greece could be forced to leave the monetary union. But concerns have greatly increased in recent days about the health of Spanish banks, which are loaded with billions of toxic loans as a result of the collapse of the country's housing sector.

Spain needs money to rescue its ailing banks, but can currently only receive such aid from the EU in a government bailout package. Madrid adamantly wants to avoid such a solution, as it would mean fellow eurozone countries and the International Monetary Fund would be allowed to impose fiscal policies on the country.

The country has been forced to pay higher interest rates on its debt, coming close last week to the seven per cent level that is widely viewed as unsustainable.

The yield on Spain’s key 10-year bond edged down to 6.24 per cent Wednesday morning on hopes the European Union may be moving closer toward adopting measures that could alleviate the country’s financial crisis.

The TSX energy sector advanced 2.64 per cent as commodity prices moved higher with the July crude contract on the New York Mercantile Exchange up 73 cents to US$85.02 a barrel. Prices have been buffeted over the past few weeks as the worsening eurozone crisis has stalled an already fragile global economic recovery with commodities hitting multi-month lows. Suncor Energy (TSX:SU) gained 94 cents to $29.24 and Cenovus Energy (TSX:CVE) ran up $1.59 to $32.47.

Prices for copper, viewed as an economic bellwether as it is used in so many applications, jumped nine cents to US$3.38 a pound and the base metals sector gained 3.4 per cent. Teck Resources (TSX:TCK.B) rose 90 cents to $32.31 while Ivanhoe Mines (TSX:IVN) gained 42 cents to $10.56.

Financials were also supportive, up 1.16 per cent as Bank of Montreal (TSX:BMO) moved ahead 62 cents to $54.98 while Sun Life Financial (TSX:SU) was 84 cents higher to $21.35.

Laurentian Bank's B2B Trust (TSX:LB) will pay about $415.5 million in cash to acquire the trust operation of AGF Management Ltd. (TSX:AGF.B). AGF's shares gained 52 cents to $12.24.

Laurentian Bank (TSX:LB) also said that it will boost its quarterly dividend by two cents to 47 cents per common share. Laurentian shares gained $1.11 to $42.35.

The gold sector drifted into negative territory, down about one per cent while bullion prices also improved with the August contract ahead $17.30 to US$1,634.20 an ounce, its highest close in a month. Goldcorp Inc. (TSX:IMG) faded 48 cents to $41.30.

Traders also took in a major shakeup of the senior management at Canada’s biggest gold company, which has been disappointed by its stock performance.

Barrick Gold Corp. (TSX:ABX) says Aaron Regent has been replaced as president and chief executive officer by Jamie Sokalsky, who was the Toronto-based company’s chief financial officer. Barrick stock declined $2.17 at $41.53, down sharply from its 52-week high of $55.36.

The European Central Bank said earlier in the day that it was keeping its key rate unchanged at one per cent.

There had been hopes ECB President Mario Draghi would also indicate the bank is prepared to cut the rate next month to stimulate a weakening eurozone economy and at the same time approve more stimulus measures in an effort to spur governments to take action themselves.

But Draghi has said the central bank cannot make up for inaction by governments.

Analysts say the bank is now likely to see what European leaders can come up with at a summit at the end of this month.

"But the problems that have plagued the eurozone are unlikely to get resolved any time soon because at the heart one is poor design and the euro itself is flawed because there is no fiscal part of it," added Stephenson.

Stocks, commodities, euro soar in broad risk rally -

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NEW YORK (Reuters) – World stocks soared 2 percent and the euro rallied on Wednesday on talk major central banks would act to bolster a slowing global economy. Brent crude jumped above $100 a barrel, while gold hit a one-month high, leading a ...

Stocks Close Sharply Higher Amid Optimism About Stimulus - RTT News

6/6/2012 4:26 PM ET
(RTTNews) - With traders expressing optimism about further stimulus from the world's central banks, stocks moved sharply higher during trading on Wednesday. The markets extended the upward move seen in the previous session, recovering further from the sell-off seen in recent weeks.

The major averages saw further upside going into the close, ending the session at their best levels of the day. The Dow jumped 286.84 points or 2.4 percent to 12,414.79, the Nasdaq surged up 66.61 points or 2.4 percent to 2,844.72 and the S&P 500 soared 29.63 points or 2.3 percent to 1,315.13.

Much of the rally on Wall Street stemmed from the optimism about further stimulus following the Reserve Bank of Australia's interest rate cut on Tuesday.

The optimism came even as the European Central Bank announced its widely expected decision to leave interest rates unchanged following its monetary policy meeting.

Traders were also initially disappointed by ECB President Mario Draghi's remarks at a subsequent press conference, as they did not seem to indicate that the ECB was planning on providing further stimulus.

However, Draghi later told reporters that the central bank stands "ready to act" if the economic situation continues to worsen.

Positive sentiment was also generated by comments from Atlanta Federal Reserve President Dennis Lockhart, who said that the option of extending "Operation Twist" is still on the table.

Operation Twist involves replacing short-term securities in the Fed's bond portfolio with longer-term securities in an effort to push already low long-term interest rates even lower.

San Francisco Fed President John Williams also spoke late in the trading day, calling it crucial that the central bank maintains in highly stimulatory monetary policy stance.

"As part of this, we've stated our intention to keep our benchmark short-term interest rate at exceptionally low levels at least through late 2014," Williams said. "We must also stand ready to do even more if needed to best achieve our statutory goals of maximum employment and price stability."

Stocks saw continued strength following the release of the Fed's Beige Book report, which said overall economic activity expanded at a moderate pace during the reporting period from early April to late May.

While the Beige Book also said the economic outlooks remain positive, the Fed noted that contacts were slightly more guarded in their optimism.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Wednesday, adding to the gains posted in the previous session. Japan's Nikkei 225 Index surged up by 1.8 percent, while Hong Kong's Hang Seng Index jumped 1.4 percent.

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Stocks Logged Best Day of 2012 Amid Stimulus Hopes -

BACNew York, June 6th ( – Stocks rallied, with both the Dow and the S&P 500 logging their best single day gains of the year. Participants bid equities higher, as they move into riskier assets amid speculation that the Fed and other central banks will provide further stimulus measures to compensate for the worsening debt crisis in Europe and weakening economic data.


The Dow Jones Industrial Average rallied 286.84 points, or 2.37%. The S&P 500 index gained 29.63 points, or 2.3%, while the NASDAQ jumped 66.61 points, or 2.4%.


The market started the session with solid gains, as futures held to their gains despite the ECB keeping its key interest rate steady at 1% and as the central bank failed to provide concrete action to tackle the worsening debt crisis in the euro zone. However, participants kept high hopes that eventually central banks around the world will provide additional stimulus measures in order to compensate for the impacts in the global economy of the debt crisis and slower growth in China.


A report from the Wall Street Journal actually fed into the speculation for further Fed action, as the Journal reported on dovish comments from Fed’s Charlie Evans and said that the Fed was considering more action amid the new economic recovery doubts.


Stocks added to their gains late in the session after San Francisco Fed President John Williams said the central bank must stand ready to provide further action to boost the struggling labor market. The broad rally helped all the S&P 500 sectors to end in positive ground, with both the Dow and the S&P 500 index logging their best single session gain for the year.


Energy, financials, and industrials logged the biggest gains, while defensive sectors like consumer staples and utilities posted the smallest gains, but still above 1%. The energy sector rallied more than 3% after crude oil prices received a boost of more than 1.8% amid a drop in the Dollar and speculation of QE3.


In the sector, Chesapeake Energy (NYSE: CHK) rallied the most in the sector, as shares jumped more than 7% to $18.21 amid news that the company was the company is in discussions to sell its stake in Chesapeake Midstream Partners (CHKM) & other pipeline assets that could be worth about $4 billion. The gains in the stock comes after yesterday the company agreed to replace four of its current board members and as it continues to look at ways to sell assets as the company faces a cash flow shortfall amid the drop in natural gas prices.


Not all was positive in the energy sector. Alpha Natural Resources (NYSE: ANR) tumbled to the bottom of the S&P 500, as shares lost more than 5% in the session amid concerns over Chinese demand. Meanwhile, Halliburton (NYSE: HAL), the provider of oilfield technologies and services to upstream oil and gas customers, tumbled more than 3% in the session after it warned of lower second quarter margin, amid weakness in the North American market.


Financials also benefited in the session. Bank of America (NYSE: BAC) surged more than 7% to $7.61, breaking above its 200day moving average at $7.18 and posting the biggest percentage gain in the Dow Jones Industrial Average. Morgan Stanley (NYSE: MS) was the best performer in the sector, logging the second biggest gain in the broad market index as shares rallied more than 8%. The stock advanced amid news that the firm together with Blackrock will acquire an Australian real estate loan portfolio from Lloyds and on a report that Morgan was considering a sale of its commodities trading division.


The industrial sector benefited from a surge in shares of Iron Mountain (NYSE: IRM) and gains in blue chip companies like United Technologies (NYSE: UTX) and Caterpillar (NYSE:CAT). Iron Mountain soared more than 13% to the top of the S&P 500 amid news that its board approved a plan to pursue the conversion to a REIT, while announcing an 8% increase in its quarterly dividend. Meanwhile, United Technologies jumped nearly 4%, while Caterpillar gained 3.6%.


In the technology space, Apple (NASDAQ: AAPL) gained 1.53% to $571.46, actually underperforming both the technology sector and the broad market. There were reports that Apple was looking to open 2 new store in China and yesterday, Cannacord Genuity said that it channel checks indicate that iPhone shipments are tracking inline with estimates for the quarter of 27 million units, a 23% sequential drop, as consumers delay purchases in anticipation of the new iPhone 5, which is expected to be announced and a launch sometime in the early fall. The stock closed below its calculated resistance at $581.50.


Meanwhile, Sprint Nextel (NYSE: S) logged the best gain in the tech sector, as shares rallied 7.5% amid news that its unit Virgin Mobile will soon offer a pay as you go iPhone.


Internet relates stocks also saw sharp gains. Facebook (NASDAQ: FB) rallied 3.64% to $26.81 after logging a new record low of $25.52. JMP Securities initiated coverage on the stock with Outperform and a target price of $37, while the NASDAQ announced a program for voluntary accommodations related to Facebook IPO cross. The plan calls for a $40 million fund to compensate some financial firms that lost money after Facebook's botched market debut on the exchange last month. The plan applies to sell orders at $42 or less that did not execute and buy orders at $42 executed but not confirmed.


Groupon (NASDAQ: GRPN) rallied more than 8% in the session after it was upgraded to a Hold from a Sell at Stifel Nicolaus, following the sharp recent decline in the share price.


In the consumer discretionary space, PulteGroup (NYSE: PHM) rallied 7.5% to $8.76 after it was upgraded to Outperform at Credit Suisse. While Home Depot (NYSE: HD) jumped 3.4% to $50.60 after the company reaffirmed guidance for the fiscal year and said that it has expanded its share buy back plan to $4 billion.


Elsewhere, Tempur-Pedic (NYSE: TPX) plunged 48.7% as the stock got crushed after the company slashed its full year earnings and revenue outlook amid increasing competition in the North American market.

Stocks for a small-cap bounce - MSN Money

Since the stock market began to turn lower two months ago amid renewed fears about the European debt crisis, small-cap stocks have fared worse than their larger peers. It shouldn't be a surprise -- often when fears hit and the market falls investors lean toward stocks of larger companies, assuming they will be more stable and steady during tough times.


Many quality small-caps can thus get unfairly punished during such periods, creating bargains among the market's little guys. That's what's happening with many smaller stocks right now according my Guru Strategies ideas (each of which is based on the approach of a different investing great).

Very often, investors who take advantage of such bargains get a big boost when the market turns back up again, as smaller stocks outperform larger stocks when fears subside and investors begin to take on more risk.

In 2010, for example, the market really began to turn upward after its summer doldrums on Aug. 30. Over the next three months, the Standard & Poor's 500 Index ($COMPX) gained about 12.6%; the Vanguard Small Cap ETF (VB) jumped more than 20%. Last year, after stocks bottomed on Oct. 3, the S&P rose about 16.2% over the next three months; the Vanguard Small Cap ETF gained more than 21%.


I'm not saying the market has bottomed, or that you should try to time the market. What's more important here is that many high-quality small-caps are trading on the cheap. So even if they don't snap back today or next week, they're still the sort of longer-term bargains you should consider for your portfolio. (And if they do happen to turn around sooner rather than later, all the better.) Here are several my models are high on right now:


L.B. Foster Company (FSTR): Pittsburgh-based Foster ($275 million market cap) makes construction and other products that range from rail joints to bridge decking to water well piping. My Benjamin Graham-inspired model is high on the stock.

Graham, known as the father of value investing, was a very conservative investor, and this approach looks for companies with good liquidity (current ratio of at least 2.0) and a strong balance sheet (long-term debt should not exceed net current assets).

Foster has a 3.2 current ratio, no long-term debt, and about $160 million in net current assets. It also trades for a reasonable 14 times three-year average earnings, and just 0.88 times book value.


Darling International (DAR): Darling ($1.7 billion market cap) is in the business of rendering -- turning animal by-products from butcher shops, grocery stores, food service companies, and meat and poultry processors into oils and proteins used by agricultural, leather and chemical firms. It also recycles cooking oils used by restaurants into useable products like animal feed and industrial oils, and it recycles bakery waste into by-products like cookie meal (an animal feed ingredient).


Darling has been an explosive grower, upping earnings per share at a 47% pace over the long haul (I use an average of the three-, four-, and five-year earnings per share figures to determine a long-term rate.) That makes it a fast-grower according to my Peter Lynch-based model -- Lynch's favorite type of investment.

Lynch famously used the price to earnings to growth ratio to find bargain-priced growth stocks, and when we divide Darling's 10.9 price-to-earnings ratio by that long-term growth rate, we get a PEG of just 0.23. That easily comes in under this model's upper limit of 1.0. While it will be tough to maintain such a high growth rate, the stock is cheap enough that it would be a bargain at even half its current growth.


The model I base on the writings of hedge fund guru Joel Greenblatt is also high on Darling. Greenblatt's approach is a remarkably simple one that looks at just two variables: earnings yield and return on capital. Darling's 15% earnings yield and 49.7% ROC make it one of the top stocks in the market right now according to this approach.


Fred's (FRED): Fred's ($500 million market cap) operates more than 700 discount general merchandise stores in the southeastern United States. Like many discount retailers, it's done quite well in recent years, and my Lynch-based model likes its 22.2% long-term growth rate and 14.6 price-to-earnings ratio. Those figures make for a bargain-priced 0.66 PEG ratio.


Another reason my Lynch model likes Fred: The firm's debt/equity ratio is a mere 1.7%.


MWI Veterinary Supply (MWIV): This Idaho medical equipment small-cap ($1.2 billion) keys on a very specialized group of end users: animals. It sells its products, which include pharmaceuticals, vaccines, parasiticides and pet food and nutritional products, to veterinarians in the U.S. and U.K. In the past year, it has taken in more than $1.8 billion in sales.


MWI has actually outperformed the market since the downturn, but my models still think there's value in the stock. It gets strong interest from my Martin Zweig-inspired model, which likes the firm's long-term earnings per share growth (24.9%) and long-term sales growth (22%). It also likes that earnings per share have increased in each year of the past half-decade, and that MWI's debt is less than 20% of its equity.


My Lynch-based model, meanwhile, likes MWI's 24.9% long-term earnings per share growth rate. Its price-to-earnings is on the high side (24.1), but the firm's growth is high enough that its PEG ratio still comes in at 0.97, just under the model's 1.0 upper limit. And my James MWIVO'Shaughnessy-based growth model likes that it has upped earnings per share in each year of the past half-decade, and that it has an 81 relative strength and 0.65 price-to-sales ratio.


LSB Industries (LXU): LSB ($600 million market cap) manufactures a range of hydronic fan coils, heat pumps, large custom air handlers and other products used in commercial and residential air-conditioning systems, as well as chemical products for mining, quarry and construction, agricultural and industrial acid markets.


LSB gets strong interest from the approach top money manager Kenneth Fisher laid out in his 1984 classic "Super Stocks." Fisher pioneered the use of the price-to-sales ratio (PSR) as a valuation metric, finding it to be a better indicator than the more popular price-to-earnings ratio. This model looks for cyclical and industrial-type firms to have PSRs below 0.8. LSB's is 0.74, a good sign. The model also likes LSB's reasonable 26% debt-to-equity ratio, 26.2% long-term inflation-adjusted earnings per share growth rate, and three-year average net profit margins of 6.4%.


My Lynch-based model also likes LSB, thanks to its 28.6% long-term earnings per share growth rate and 8.2 price-to-earnings ratio, which make for a stellar 0.29 PEG ratio. It also likes the company's reasonable debt load.


I'm long FSTR and MWIV. 

John Reese is founder and CEO of Validea Capital Management and, a premium investment research site, and the author of "The Guru Investor: How to Beat the Market Using History's Best Investment Strategies".

Global stocks rally on central bank hopes, euro rises - Reuters UK

NEW YORK | Wed Jun 6, 2012 9:40pm BST

NEW YORK (Reuters) - World stocks rose more than 2 percent, recovering a bit from recent weakness, and the euro rallied on Wednesday on hopes that major central banks might act to bolster a slowing global economy.

Brent crude jumped above $100 (64.5 pounds) a barrel, while gold hit a one-month high, leading a broad rally in the commodities sector. Silver soared 4 percent for its largest gain in three months and copper gained 3 percent.

A Federal Reserve official sounded more inclined to consider further help for the U.S. economy, while the European Central Bank left rates unchanged and its president, Mario Draghi, suggested near-term action was unlikely. But some investors interpreted his comment that risks to the economy had grown as a sign of possible future action by the ECB.

"Since we're likely to see more economic weakness in the months ahead, it's reasonable for the markets to assume the chance of an ECB rate cut has gone up," said Robert Tipp, chief investment strategist for Prudential Fixed Income, with $330 billion in assets under management.

"Risk markets find that reassuring because there haven't been that many accommodative signals coming out of the ECB in recent weeks."

The chatter was enough to spur buying in world stocks, which have been hit hard of late and lost more than 11 percent between April 27 and Tuesday as the euro zone's debt crisis appeared to worsen. The sharp slide in stocks was seen as overdone by some.

The MSCI World Equity Index jumped 2.3 percent for its biggest daily gain since December. The MSCI Emerging Equity Index gained 2 percent, rebounding from a six-month low hit on Monday.

Wall Street shares closed sharply higher, with the S&P staging a major reversal above its 200-day moving average.

The Dow Jones industrial average ended up 286.84 points, or 2.37 percent, at 12,414.79. The Standard & Poor's 500 Index was up 29.63 points, or 2.30 percent, at 1,315.13. The Nasdaq Composite Index was up 66.61 points, or 2.40 percent, at 2,844.72.

"The evidence was there that the market was at least getting close to the point of seller exhaustion. Once that happens, the pressure to cover short positions increases," said Chris Burba, a short-term market technician at Standard & Poor's in New York.

The European Central Bank resisted pressure to provide immediate support for the euro zone's ailing economy by holding interest rates steady at 1 percent. But in a later statement, Draghi noted "increased downside risks to the economic outlook" and saw annual inflation falling below 2 percent in early 2013. The comments supported hopes for more accommodation down the road.

A similar tone was struck by Atlanta Fed President Dennis Lockhart, who said the U.S. central bank may need to consider additional monetary easing if a wobbly U.S. economy falters or Europe's troubles generate a broader financial shock.


Fed Chairman Ben Bernanke testifies before the U.S. congressional Joint Economic Committee on Thursday and could provide hints on the possibility of further monetary easing. The Group of 20 economies is scheduled to meet later this month.

"We could well see easing taking place throughout many of the G10 countries," said Ian Stannard, an executive director at Morgan Stanley. "We believe that quantitative easing from the Fed is also very much back on the table."

Markets were also supported by signs of urgent moves by Germany and the European Union to find ways to rescue Spain's troubled banks.

Spain, the euro zone's fourth-biggest economy, said on Tuesday it was effectively losing access to credit markets due to prohibitive borrowing costs.

Prices of U.S. Treasuries fell for the third day in a row after the benchmark 10-year yield hit an historic low last week. The 10-year U.S. Treasury note was down 26/32, the yield at 1.6609 percent.

The euro gained 0.9 percent to $1.2570, well off the near two-year low of $1.2286 set on Friday, as a broad rally in risky assets sent investors scrambling to cover bets against the currency.

"Lack of negative news overnight and from Draghi prompted a short squeeze," said Michael Woolfolk, senior currency strategist at BNY Mellon in New York.

The dollar rose 0.6 percent to 79.24 yen.

Brent crude surged to an intra-day high of $101.39 a barrel before easing to settle at $100.64, up $1.80. U.S. crude climbed 73 cents to end at $85.02.

Gold rose more than 1 percent before turning flat after the Fed said in its Beige Book summary that U.S. economic growth picked up over the two prior months, decreasing the bullion's appeal as an investment hedge against economic uncertainty.

German 10-year bond yields rose 12 basis points to 1.32 percent, bouncing off a record low of 1.127 percent hit last Friday as nervousness over Spain's finances prompted a surge in demand for safer assets.

Bund yields could rise further in coming sessions, especially if Spain passes a key test for investor demand for its debt at an auction on Thursday, strategists said.

Spanish 10-year bond yields were two basis points lower on the day at 6.29 percent, extending this week's fall to around 25 basis points.

US STOCKS-Talk of Spain solution boosts Wall St - Reuters UK

Wed Jun 6, 2012 4:58pm BST

* EU sources say options explored to rescue Spanish banks

* All 10 S&P sectors higher; tech, energy lead

* Tempur-Pedic shares plunge after revising forecast

* Stocks up: Dow 1.7 pct, S&P 1.7 pct, Nasdaq 2 pct (Updates to late morning, changes byline)

By Chuck Mikolajczak

NEW YORK, June 6 (Reuters) - U.S. stocks rose on Wednesday as signs of urgent moves in Europe to rescue Spain's troubled banks sparked a rebound in beaten-down shares, pushing the broad S&P 500 index through a key support level.

European sources said Germany and European Union officials sought solutions for Spain's weakened banks, the latest worry in the fiscally troubled euro zone, although Madrid has not yet requested assistance and is resisting political conditions.

After a drop of more than 6 percent in the S&P 500 for May and a three-day slide to close out the prior week, the market was ripe for a rebound.

"Because of the nature of the selloff and how efficient it was, the bounce-back we are seeing over the last two days and today in particular really does make one think we've got the worst of the selloff behind us," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.

"Keep in mind, although a rally of this type is welcome, nothing has significantly changed," he said.

Tuesday's gains left the index right at its 200-day moving average, and that support level acted as a springboard for investors to jump back into the market. All 10 S&P 500 sectors were higher on Wednesday, led by the energy, financial and technology sectors, all of which are tied to strong global demand.

Underscoring the difficulty in tackling the euro zone crisis, European Central Bank President Mario Draghi suggested further stimulus to tackle the euro zone's debt crisis would not necessarily be forthcoming. The ECB left interest rates unchanged following its meeting Wednesday.

The Dow Jones industrial average rose 204.84 points, or 1.69 percent, to 12,332.79. The S&P 500 Index gained 22.37 points, or 1.74 percent, to 1,307.87. The Nasdaq Composite added 56.77 points, or 2.04 percent, to 2,834.88.

Investors will get a detailed look at the state of the U.S. economy from the Federal Reserve's Beige Book of regional economic conditions due at 2 p.m.(1800 GMT). Fed Chairman Ben Bernanke will testify on the economy before a congressional committee on Thursday.

U.S. non-farm productivity fell more than expected in the first quarter as companies gave more hours to employees but only modestly expanded output.

Facebook Inc is making it easier for advertisers to reach the growing ranks of users on smartphones and mobile devices, taking a significant step toward addressing one of investors' most pressing concerns and broadening its appeal to marketers. The stock rose 1.6 percent to $26.29.

Shares of Tempur-Pedic International Inc. fell 41 percent to $25.88 after revising its full year forecast. Fellow mattress makers also slumped, wth Select Comfort Corp down 18.2 percent to $21.22 and Mattress Firm Holding Corp off 20.3 percent to $28.12. (Reporting By Chuck Mikolajczak; Editing by Kenneth Barry)

Stocks rise ahead of ECB meeting - Belfast Telegraph
World stock markets have perked up as a meeting of the European Central Bank raises hopes for some type of action to ease the continent's debt and banking crisis.

The meeting of the ECB's governing council, to be held later, gave hope to traders downcast by a dismal slew of economic data, including a disappointing US jobs report and a months-long slowdown in Chinese manufacturing.

European shares rose in early trading. The FTSE 100 in Britain, where markets were closed on Monday and Tuesday for Jubilee celebrations, gained 1.5% to 5,336.86. Germany's DAX rose 1.9% to 6,084.43 and France's CAC-40 gained 2% to 3,045.93.

Wall Street appeared set for gains, with Dow Jones industrial futures rising 0.8% to 12,222 and S&P 500 futures adding 1% to 1,298.

Asian stocks, meanwhile, rose following the release of data by the Institute for Supply Management that showed US non-manufacturing activity edging up to 53.7 last month from an April reading of 53.5.

Japan's Nikkei 225 rose 1.8% to close at 8,533.53. Hong Kong's Hang Seng added 1.4% to 18,520.53. Australia's S&P/ASX 200 edged 0.3% up to 4,055.30. Benchmarks in Singapore, Indonesia and Taiwan also moved higher, but those in mainland China fell. Markets in South Korea were shut for a public holiday.

Some analysts said investors were hanging on to hopes for action by central banks and other authorities to stimulate growth, including a new round of quantitative easing by the US Federal Reserve.

"Right now what is keeping the market alive is just accommodative policies from governments around the world," said Lee Kok Joo, head of research at Phillip Securities in Singapore.

"If we look at market activity closely, the volume doesn't seem to be so strong. There are still a lot of people who are not believers yet who are just staying on the sidelines, waiting for clearer visibility."

That might come on June 17 when Greece holds elections that could determine whether the country will leave the euro currency union. A messy exit from the currency bloc by Greece would be sure to hit financial markets.

Business as usual for the Royal family as they go straight back to work after Diamond Jubilee triumph - Daily Telegraph

Mr Rajapakse, whose Range Rover did not carry a flag because of security concerns, was jeered by hundreds of Tamils and other human rights campaigners who accuse him of torturing prisoners. He had earlier been forced to cancel a speech to the Commonwealth Economic Forum.

The Queen appeared relaxed about the presence of the protestors as she was handed a bouquet on her arrival by nine-year-old Aduke Badale, the daughter of one of the Secretariat’s staff.

Wearing a floral print silk dress by Stuart Parvin and a blue wool crepe hat, the Queen was welcomed by Mr Sharma, who told the guests: “It gives me great pleasure to welcome you all on this very special day in the history of the Commonwealth.”

The Queen was presented with a plaque on which the leaders expressed their “profound admiration and abiding appreciation for the manner in which Her Majesty has diligently and faithfully served the Commonwealth”.

The lunch was the Queen’s second official engagement of the day, following an audience with the Canadian Prime Minister, Stephen Harper, during which she unveiled a new portrait of herself by the Canadian artist Phil Richards, commissioned by the Government of Canada.

In Scotland the Prince of Wales, or Duke of Rothesay as he is known north of the border, opened the biennial Scotsheep event in the grounds of Dumfries House, the stately home renovated by charities brought together by the Prince in Cumnock, Ayrshire.

Carrying a shepherd’s crook and wearing a flat cap, or bunnet, and black wellies, the Prince told farmers it was “a shame” that he had not been able to visit the previous day, but joked that he had had “a very busy few days”.

He had travelled to Scotland immediately after Tuesday’s Jubilee events and spent the night at Dumfries House before opening the event, which is the flagship show of Scotland’s National Sheep Association.

The Duke of Cambridge was heading back to Anglesey to resume his work with his RAF Search and Rescue Squadron and Prince Harry has returned to his Apache helicopter duties with the Army.

Next week the Queen will resume her round-Britain Diamond Jubilee tour by visiting Nottingham, Lincolnshire Northamptonshire and Hertfordshire.

The Duke of Edinburgh is expected to be out of hospital by then, but will wait for advice from doctors before any decision is made on whether he is well enough to accompany the Queen, as he is scheduled to.

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