Stocks pause following big rally

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Stocks are pausing after their biggest rally in more than two years yesterday.

S&P 500 futures are little-changed this morning, while European markets are mixed. Most Asian indexes climbed 1 percent to 2 percent in the overnight session.

The S&P 500 climbed 2.18 percent yesterday, its strongest advance since August 2011, after House Republicans agreed to temporarily raise the country's debt limit in return for a meeting with President Obama. That conference produced no specific results, but talks are continuing.

Investors have been worried that Congress and the White House will fail to reach an agreement over the debt ceiling by the Oct. 17 deadline. The federal government also remains mostly closed because politicians have yet to pass a budget for the current fiscal year.

Yesterday's rally was broad-based, led by financials, industrials, and consumer cyclicals. International stocks also climbed and continue to outshine the United States in the nearer term. Our researchLAB market scanner shows, for instance, that S&P 500 is the third-best performing country index on a year-to-date basis. But in the last three months, it ranks 19th out of 22. Spain, Italy and Brazil have led during that time.

News from overseas markets will continue in the near term: China reports trade figures tonight, the Eurozone reports industrial production Monday morning and Germany's Zew survey of investor confidence follows on Tuesday.

Then U.S. corporate earnings pick up the pace. Today's big report came from JP Morgan, which is up 1.5 percent in early trading after quarterly profit beat expectations. Wells Fargo issues numbers later this morning. Citigroup appears on Tuesday, followed by Yahoo, Intel, Bank of America, eBay, International Business Machines, Goldman Sachs, Google and Morgan Stanley. Today's only economic release in the U.S. is consumer sentiment at 9:55 a.m. ET. (See related calendar story )

Trading is bullish in foreign-exchange markets, with the euro and Australian dollar higher and the safe-haven Japanese yen falling. Commodities are mixed, as oil and precious metals decline. Perhaps more importantly, the bigger drop is occurring in West Texas Intermediate crude rather than Brent, which is potentially bullish for refiner stocks. Copper is eking out small gains and agricultural products are mostly lower.

Other companies aside from JPM are moving: Supermarket chain Safeway is rallying 7 percent after announcing that it would exit the highly competitive Chicago market. IT-outsourcing company Infosys is up 5 percent after announcing strong quarterly results, and Osiris Therapeutics rose 21 percent after selling one of its product lines for as much as $100 million.

Retailer Gap may fall after reporting a surprise drop in same-store sales yesterday afternoon. Most retailers that report monthly numbers missed estimates yesterday.

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