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Stocks staged a dramatic turnaround in the final two hours of trading as investors grow increasingly confident that the recent downturn in stocks is overdone.  The S&P rallied 3% intraday to finish marginally higher on the session.  The rally occurred on no news, but did coincide with a sharp rally in the Euro which also over 1% during the session.  Volume was heavy on the day with almost 2B shares trading at the NYSE.  Breadth was negative at almost 2:1.  Credit markets once again disagreed with the action in equities as the TED spread and LIBOR/OIS both widened during the day.

From Daily Futures:

U.S. Economy
The stock market started the day sharply lower with ongoing concerns about Europe’s problems. NBC News reported that North Korean troops are not on alert, as was rumored. Most commodities closed lower.

This may be obsolete now, but the Conference Board’s index of consumer confidence increased from 57.7 to 63.3 in May, better than expected.

The Standard and Poor’s/Case-Shiller index of home prices in 20 U.S. cities was up 2.3% in March from a year ago, less than expected. July lumber closed down its $10 daily limit at $235.00.

The U.S. Treasury sold $42 billion of 2-year T-notes at a median yield of .73% with a bid-to-cover ratio of 2.93.

The Richmond Federal Reserve’s index of regional manufacturing fell from 30 to 26 in May, as expected.

Grains and Cotton
After yesterday’s close, the USDA said that 93% of the corn crop was planted and 71% of it was rated good to excellent. July corn closed down 6.75 cents at $3.642.

The USDA also said that 91% of the spring wheat crop was planted and 85% of it was rated good to excellent. July wheat fell 7 cents to $4.605.

Cattle and hogs both finished lower, hurt by today’s lower stock market and concerns about future demand. August cattle were down 1.12 at 89.07 and August hogs closed down .62 at 82.02.

Surprisingly, July cocoa finished up $7 at $2,922 in the face of today’s broad selling.

In today’s nervous environment, July copper fell 10.55 cents to $3.042 and August gold closed up $4.00 at $1,199.80.

The U.K.’s Office for National Statistics said that real GDP was up .3% in the first quarter and down .2% from a year ago, a slight improvement from last month’s estimates. The June British pound closed down .0080 at $1.4365.

Eurostat’s index of industrial new orders for the EU-27 was up 5.9% in March and up 20.7% from a year ago, much stronger than expected.

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