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Stocks rebound after positive reports

David Russell (david.russell@optionmonster.com)

Stocks are climbing today as a two-day pullback draws buyers back to the market.

S&P 500 futures are higher by almost half a percent and have been climbing in the last hour. Europe is up by more than a full percentage point in Europe, while Asian bourses were mixed overnight.

Earnings from companies including Hewlett-Packard and American International Group came in better than expected after the closing bell yesterday, followed by strong German business confidence this morning. In addition, St. Louis Federal Reserve President James Bullard told CNBC this morning that central-bank policy would remain "easy" for a "long time." That may counter the beliefs of some investors who interpreted the Fed minutes on Wednesday as favoring more stringent measures.

The S&P 500 peaked at a five-year high of about 1531 earlier this week before pulling back. Yesterday it held support at the key 1500 level, indicating that many buyers remain on the sidelines.

There are no more economic reports on today's calendar. The next big events are Italian elections and Chinese manufacturing data early next week.

Commodities and currencies are mostly painting a bullish picture. Oil is up about half a percent, while most agricultural foodstuffs are higher. The euro is modestly lower, but the Japanese yen is down as well. The Australian dollar is rallying strongly after a central banker suggested that interest rates won't be lowered anytime soon.

In company-specific news, Hewlett-Packard is up 5 percent after earnings and revenue beat expectations. Management also issued strong forward guidance. AIG rose 4 percent after its release, and Aruba Networks is up 15 percent after a better-than-expected report.

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