European optimism lifts S&P 500

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U.S. stocks are melting higher again as sentiment continues to improve in Europe.

S&P 500 are up almost 0.5 percent, following modest gains in Germany and France. Spain is the catalyst once again, rallying by 1.5 percent after Reuters reported that Madrid was ready to seek a bailout. That would let the European Central Bank buy its debt.

Indexes were also mostly positive in the Asia-Pacific region during the overnight session as Chinese stocks continued to rebound from long-term lows and as investors reacted to surprisingly strong U.S. manufacturing data yesterday.

The one standout headline came from Australia, which unexpectedly cut interest rates amid worries that economic growth will remain weak in key trading partner China. That's pushing the Australian dollar lower by almost 0.5 percent against the U.S. dollar and weighing slightly on commodities.

In commodities, agricultural foodstuffs are down the most while oil, copper, and silver are posting small declines. Copper, however, is up by almost 0.5 percent and natural gas is higher by more than 1 percent.

Aside from the Australian dollar, currencies are showing a modest theme of risk appetite, with the euro higher against both the greenback and the Japanese yen.

Credit Suisse also upgraded U.S. banks to "overweight," citing better credit quality and improving loans volumes. JP Morgan and Huntington Bancshares are among their top picks.

In company-specific news, Mosaic has declined by almost 2 percent after missing earnings and revenue forecasts. Fifth & Pacific, formerly known as Liz Claiborne, has dropped 12 percent after cutting its earnings guidance.

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