Stocks rally to session highs, with the S&P 500. Seven of the ten sectors are up more than 5%. There does not appear to be a specific news item to account for the surge.
Retailers (+7.8%) are showing notable strength. Target (TGT 36.51, +3.82) is up 11.7%. Pershing Square Capital Management shared ideas related to an alternative ownership structure related to Target's real estate.
Meanwhile, Treasuries extend their declines. The 10-year note is down more than a point, to send its yield up to 3.81%.

"We believe large cap earnings will fall about 14% in 2009 after a 13% drop in 2008 and -4% in 2007, before rebounding 7% in 2010. Equities have likely fallen more than earnings will looking forward. Surging credit costs have pushed up required equity returns, also driving the deeper recession in our outlook."

Stocks are on the retreat, but still post solid gains.
Within the S&P 500, 359 stocks are in positive territory. By percent change, the biggest advancers are General Growth Properties (2.59, +0.62), +31.5%, and Interpublic Group (IPG 4.82, +0.72), +17.6%. The biggest losers are Convergy (CVG 7.16, -2.75), -27.8%, and MGIC Investment (MTG 1.76, -0.39), -18.1%.

The yen fell the most against the euro since January 2001 and dropped versus the dollar as a rebound in global stocks encouraged investors to reduce bets against higher-yielding currencies.

The move reverses earlier squeeze higher on recovery in European/Asian stocks and OPEC talk of taking more action to halt the slide in oil price. WTI Nymex crude oil is now at $63.00, down 22 cents.

The stock market is on the rise, climbing to a gain of more than 2%. The recovery effort is broad-based, led by consumer staples (+2.2%) and telecom (+5.3%).
The Dow has outperformed throughout the session. Boeing (BA 44.49, +2.17) is up 5.6% after it reached a four-year tentative labor agreement with its striking machinist union. The union, Boeing's largest, has been on strike since the beginning of September due to disagreements on compensation, benefits and job security.

--ECB's monetary policy to continue to be based on price stability
--Labor market rigidities risk disanchoring inflation expectations
--Service sector inflation not in line with medium-term price stability
--ECB monetary policy is constrained by labor market rigidities
--Efforts to lift productivity can cut inflation pressure
--Europe must strive to deliver growth, jobs, low inflation

Stocks gained near midday Tuesday, recharging a stalled morning advance sparked by surging markets around the globe.

Edges back up to Y95.60 area from Y95.00 lows seen an hour ago, the easy link being the rebound in US stocks in recent trading. Pair earlier stalled a bit above Y95.70 and talk suggested some decent supply emerged at Y95.70/80, ahead of known offers at Y96.00 area.

The S&P 500 recovers from negative territory, but is still well off its high. Treasuries are in the red this session on the long end of the curve, while the short end is seeing some gains.
European markets faltered in conjunction with the recent retreat in U.S. stocks. France's CAC (-0.8%) slipped into the red, while the FTSE is now up only 0.4%. Germany's DAX is well off its high, but is still up 4.7% as Volkswagen surges 30%. On Sunday, Porsche announced it was increasing its stake in Volkswagen. There is speculation that the gains in Volkswagen is due to hedge funds covering their shorts, according to CNBC. Volkswagen is up 222% in two days.

"We are looking at the largest employment decline thus far in the 2008 recession (yet to be declared by the NBERbut this will surely not be long in coming). We believe we are looking at a 200,000+ drop in nonfarm payrolls."

Present Situation 41.9 vs 61.1; Expectations 35.5 vs 61.5. Buying plans rose for homes, slipped elsewhere. 1y infl expectations 6.9% vs 6.2% in Sept. Jobs Plentiful 8.9 vs 12.6; Hard to get 37.2 vs 32.2.

The S&P 500 rebounds following Monday's late-session sell off as global markets rally.
In Asia, Hong Kong's Hang Seng rallied 14.4% and Japan's Nikkei rose 6.4%. In Europe, France's CAC is up 2.5%, Germany's DAX is up 8.9% and London's FTSE is up 3.4%. The DAX is benefiting from a 54% rally in shares of Volkswagen and the FTSE is benefiting from better-than-expected earnings from BP (BP 44.56, +4.44).
In the U.S., Occidental Petroleum (OXY 45.17, +3.09), Valero Energy (VLO 16.88, +1.77) and U.S. Steel (X 31.60, +0.78) posted better-than-expected quarterly earnings. Whirlpool (WHR 47.65, -2.38) beat for its latest quarter, but issued downside guidance.

Futures trade near session highs and point to a sharply higher open: S&P futures vs fair value: +24.90. Nasdaq futures vs fair value: +37.80. Asian markets rallied, and European markets are currently posting strong gains. In corporate news, Chrysler and GM (GM) had their credit ratings cut at Moody's, Ford's (F) rating was put on review for a downgrade. Wal-Mart (WMT) plans to cut its store expansion plans, the Wall Street Journal reports. GE (GE) used the Fed's commercial paper facility, according to reports. Boeing (BA) and its machinist union have reached a tentative four-year agreement, the Financial Times reports. In earnings news, BP (BP), Occidental Petroleum and Valero Energy (VLO) all topped expectations. Whirlpool (WHR) posted higher than expected earnings for its latest quarter, but gave downside guidance and announced 5,000 job cuts. U.S. Steel (X) reported third quarter earnings of $7.79, which was $0.70 better than the average analyst estimate. However, the steel company did acknowledge it having "significant negative effects" on its business.

"We believe large cap earnings will fall about 14% in 2009 after a 13% drop in 2008 and -4% in 2007, before rebounding 7% in 2010. Equities have likely fallen more than earnings will looking forward. Surging credit costs have pushed up required equity returns, also driving the deeper recession in our outlook."

Goldman Sachs now expect the Refi rate to "trough at 2.0% by the end of Q1, with a possibility of an unprecedented 1-handle during the spring of 2009", writes Erik Nielson at GS. Goldman's now see a 50bps rate cut in November, another 50bps in December, followed by 25bp in each month during Q1 -- "but, needless to say, the exact path down to 2% is somewhat uncertain, but it'll be fast and furious as the ECB plays its most obvious remaining card in the fight against the financial tsunami. The exact timing of the cuts will largely dependent on market events between now and spring"...."If Euroland consumers were to continue boosting their savings into the spring and summer of 2009, preventing private consumption from picking up (if ever so moderately), then the ECB might well decide to go below 2% for some time", says GS.

The pound snapped a seven-day losing streak against the dollar on speculation rising stock markets will increase demand for the British currency.
The pound also gained versus the yen and Britain's government bonds slid as stock-market gains sapped demand for the safest assets. The FTSE 100 Index, a U.K. equity benchmark, climbed 1.5 percent and the cost of protecting European company bonds from default fell, credit-default swaps showed. The pound's relative strength index, a chart used to indicate price direction, also signaled it was poised to rebound.
``There's been a really strong correlation between currencies and equities lately,'' said John Hydeskov, a senior analyst in Copenhagen at Danske Bank A/S, Denmark's biggest bank. ``The pound has been hit hard by this continued deleveraging. The gains in equities today are quite strong, so risk sentiment keeps things in balance.''
The yen fell the most in two weeks against the euro and dropped for the first time in six days versus the dollar as a rebound in Asian stocks bolstered investor confidence in higher-yielding assets.
The yen also declined on speculation Japan's central bank will sell the currency for the first time since March 2004 to help exporters. Japanese Finance Minister Shoichi Nakagawa said yesterday the government is ready to act if needed to halt gains in the yen, which earlier traded near a 13-year high against the dollar and its strongest since May 2002 versus the euro.
``It's all about what's happening in stocks and that's giving us the impetus to unwind some of the risk-aversion trades,'' said Jeremy Stretch, a senior currency strategist in London at Rabobank International, the third-largest Dutch bank. ``Intervention is a real risk.''
Gains in the common European currency may be limited after European Central Bank President Jean-Claude Trichet said yesterday he may cut interest rates next week. Europe's economy is on the brink of a recession, with the region's manufacturing and service industries contracting at a record pace in October and German business confidence dropping to a five-year low.
Investors are betting the ECB will lower borrowing costs further by June after cutting the main refinancing rate by a half point to 3.75 percent on Oct. 8. The implied yield on the three-month Euribor contract expiring in June fell to 3.020 percent today from 3.225 percent a week earlier. ``Worries over Europe's economy are heightening and Trichet has signaled lower rates,'' said Ryohei Muramatsu, manager of Group Treasury Asia at Commerzbank AG in Tokyo. ``The bias for the euro is down.'' The euro may weaken to $1.22 this week, he forecast.

Resistance 3: Y98.00
Resistance 2: Y96.60
Resistance 1: Y95.90
Current price: Y94.67
Support 1: Y93.00
Support 2: Y91.90
Support 3: Y90.90
Comments: The yen was corrected after morning growth.The nearest resistance is the area of Thursdayэы low and a today's high on Y95,90/Y96,20. Above is possible growth to a level 50,0% FIBO of falling Y102,40-Y90,90 on Y96,60. Overcoming of the given mark will open road to Y98,00 (61,8 %). The nearest support is area Y93,00 (inside a day time line of support). Below possible falling to yesterday's low on Y91,90 and further to Friday's low on Y90,90.

Resistance 3: Chf1.1880
Resistance 2: Chf1.1780
Resistance 1: Chf1.1700
Current price: Chf1.1600
Support 1: Chf1.1530
Support 2: Chf1.1480
Support 3: Chf1.1420
Comments: Tech on USD/CHF hasn't changed. The line of a trend from July 17 acts as the nearest support (Chf1,1530, the given mark also is area of a yesterday's low). Overcoming of the given mark will open road to Friday's low on Chf1,1480 and further to Chf 1.1420 (area of September 11 high). The nearest resistance is located in the field of a yesterday's high, and also area of October 22-23 high on Chf1.1700, above is located the peak on October 21 2007 on Chf1.1780. Overcoming of the given mark will open road to Chf1.1880/Chf1,1900 (area of October 2007 high).

Resistance 3: $1.6350
Resistance 2: $1.6040
Resistance 1: $1.5920
Current price: $1.5662
Support 1: $1.5260
Support 2: $1.5150
Support 3: $1.4850
Comments: The pound remains within the limits of yesterday's levels. The nearest support - area of six years low on $1,5260. Overcoming of the given mark will open road to $1,5150 (area of July 2002 low) and further to $1,4850 (area of October 2001 high). The nearest resistance - $1,5920 (61,8 % of Friday falling). Above there is a chance of return to $1,6040 (area of Thursday's low) and further to $1,6350 (area of Thursday's high).

Resistance 3:$1.2740
Resistance 2: $1.2690
Resistance 1: $1.2585
Current price: $1.2573
Support 1: $1.2330
Support 2: $1.2200
Support 3: $1.2160
Comments: Tech on euro hasn't changed. Nearest support - area of lows on $1,2330. Overcoming of the given mark will open road to $1.2200. Below there is a probability of falling to $1,2160 (100 % of a projection of decrease $1.4862/1.3258). Intermediate resistance is the level $1,2585 (area of a yesterday's low).Above is located the mark $1,2690 (area of a yesterday's high) which overcoming will open road to $1,2740 (area of October 22 and 23 low).

German Xetra-DAX is now up 10% -- Volkswagen shares extending Monday's short-squeeze rally after Porsche announced that it plans to raise its stake in VW to 75%.

GBP/USD
Offers $1.5945/50, $1.5820/25, $1.5750, $1.5620
Bids $1.5487, $1.5400/10

EUR/JPY
Offers Y121.00, Y120.50/60
Bids Y117.50, Y116.90/10, Y114.50/60

EUR/GBP
Offers stg0.8125, stg0.8050
Bids stg0.7945/60

The yen fell the most in two weeks against the euro and dropped for the first time in six days versus the dollar as a rebound in Asian stocks bolstered investor confidence in higher-yielding assets.
The yen also declined on speculation Japan's central bank will sell the currency for the first time since March 2004 to help exporters. Japanese Finance Minister Shoichi Nakagawa said yesterday the government is ready to act if needed to halt gains in the yen, which earlier traded near a 13-year high against the dollar and its strongest since May 2002 versus the euro.
Japan's Economic and Fiscal Policy Minister Kaoru Yosano said in Tokyo today that abrupt increases in currency volatility are undesirable. The yen has appreciated this month against all of some 170 global currencies tracked by Bloomberg, eroding Japanese exporters' overseas income.
Gains in the common European currency may be limited after European Central Bank President Jean-Claude Trichet said yesterday he may cut interest rates next week. Europe's economy is on the brink of a recession, with the region's manufacturing and service industries contracting at a record pace in October and German business confidence dropping to a five-year low.
Investors are betting the ECB will lower borrowing costs further by June after cutting the main refinancing rate by a half point to 3.75 percent on Oct. 8. The implied yield on the three-month Euribor contract expiring in June fell to 3.020 percent today from 3.225 percent a week earlier.

EUR/USD having tested low on $1.2330, the pair has raised in area $1,2580.
GBP/USD having established session lowon $1,5400, the rate has grown in area $1,5760 then has again receded below a mark $1,5600.
USD/JPY the pair has shown session high at level Y96,20. Then it was corrected in area Y94,50.

UK data at 1100GMT sees September Land Registry House Prices as well as the CBI distributive trades survey.
At 14:00 GMT will be published US Consumer confidence (October).
At 21:45 GMT trade balanc of New Zealand will be published.

The yen rose to the strongest level versus the euro since May 2002 and traded near a 13-year high against the dollar as global economic turmoil encouraged investors to sell higher-yielding assets funded in Japan.
French Finance Minister Christine Lagarde said in an interview with Bloomberg News that the Group of Seven doesn't plan to intervene to weaken the yen after the G-7 said in an unscheduled statement that excessive movements in the currency may threaten financial stability. The pound slid after an industry report showed U.K. house prices slumped.
In the past month, Japan's currency has increased 14 percent against the dollar, 33 percent versus the euro, 55 percent versus the Australian dollar and 44 percent against the New Zealand dollar on speculation investors will unwind carry trades, in which they get loans in countries with low borrowing costs and seek higher returns elsewhere.
Stocks in Asia and Europe tumbled as investors bet the credit crisis and mounting bank losses will lead to a global recession. Hong Kong's Hang Seng Index sank as much as 15 percent, and trading was halted in the Philippines and Thailand. The Standard & Poor's 500 Index gained 0.1 percent.
The euro stayed lower against the dollar and the yen after a survey by the Ifo institute showed business confidence in Germany, the largest of the 15 economies sharing the currency, declined to the lowest level in more than five years in October. European Central Bank President Jean-Claude Trichet said policy makers may cut interest rates at their Nov. 6 meeting.
The dollar is reasserting its status as the world's reserve currency as investors seek a haven from plunging emerging-market stocks and bonds. The ICE futures exchange's Dollar Index, which tracks the greenback against the currencies of six major trading partners, soared to the highest in more than two years. The sell-off in emerging markets may ``set the stage'' for bigger gains, according to Barclays Capital.

EUR/USD the pair on results of session has slightly decreased. Having opened the tenders of week in the field of $1,2530, the pair could update two years low on $1,2330 then has receded above a level $1,2450.
GBP/USD having tested six years low on $1,5265, the pair has returned above a level $1,5500.
USD/JPY the rate bargained within the limits of Y92,00-Y94,40.

European data for Tuesday starts at 0710GMT with German Gfk consumer confidence data. UK data at 1100GMT sees September Land Registry House Prices as well as the CBI distributive trades survey.
At 14:00 GMT will be published US Consumer confidence (October).
At 21:45 GMT trade balanc of New Zealand will be published.

Japan's Nikkei 225 ended up 6.4% on Tuesday, rebounding from sharp declines in the morning that saw the index briefly break below 7,000 for the first time in 26 years. The Nikkei gained 459.02 points to 7,621.92. It earlier fell as much as 2.3% to 6,994.90, its lowest since 1982. The broader Topix rose 5% to 784.03 after falling 3% at one stage.

Japan's stocks sank to the lowest in more than two decades on concern banks will need government help to restore their financial health and as the strengthening yen damped profit prospects for companies dependent on overseas sales.
Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc. dropped by records on media reports they may sell new shares to replenish capital. Aiful Corp., the nation's No. 4 consumer lender by value, slid 14 percent, and Aioi Insurance Co. declined 20 percent. Isuzu Motors Ltd. and Fuji Heavy Industries Ltd. both plunged the most on record as the yen rose a fifth day, diminishing the value of overseas sales.
The Nikkei 225 Stock Average lost 486.18, or 6.4 percent, to 7,162.90 in Tokyo, the lowest close since October 1982 and capping a four-day plunge of 23 percent, the most since at least 1970 based on Bloomberg data. The Topix index fell 59.65, or 7.4 percent, to 746.46, the lowest since January 1984. The gauges widened drops in the afternoon as comments by the Group of Seven industrialized nations failed to halt the yen's advance.

European stocks fell for the fifth day, extending the Dow Jones Stoxx 600 Index's worst month on record, as concern grew that government efforts to stabilize financial markets won't avert a global recession.
Deutsche Bank AG, Germany's biggest, and Societe Generale SA of France retreated more than 10 percent. Deutsche Postbank AG slid 24 percent after the consumer bank reported a third-quarter loss related to the collapse of Lehman Brothers Holdings Inc. Royal DSM NV sank 15 percent and Lonza Group AG slumped 18 percent after the chemical companies said the global economic crisis will cut profit growth.
The Stoxx 600 declined 1.9 percent to 195.04. Reports showed German business confidence decreased more than forecast this month and U.K. house prices fell by the most in at least seven years in October and may keep declining as the economy deteriorates.
National benchmark indexes declined in all of the 18 western European markets except Greece. France's CAC 40 slumped 4 percent, and the U.K.'s FTSE 100 lost 0.8 percent. Germany's DAX slid 0.2 percent. Volkswagen AG shares surged 147 percent today, helping to limit the German benchmark's drop.
Stocks pared some losses after a report showed sales of new houses in the U.S. unexpectedly rose and European Central Bank President Jean-Claude Trichet signaled he may cut borrowing costs as early as next week.

Stocks may have closed with substantial losses Friday, but the extent of the downturn was far better than many initially feared.
Index future

Resistance 3: Y98.00
Resistance 2: Y96.60
Resistance 1: Y95.90
Current price: Y94.58
Support 1: Y93.00
Support 2: Y91.90
Support 3: Y90.90
Comments: The yen fell for the first time in six days against the dollar on speculation Japan's central bank will sell its currency for the first time since March 2004. The nearest resistance is the area of Thursdayэы low and a today's high on Y95,90/Y96,20. Above is possible growth to a level 50,0% FIBO of falling Y102,40-Y90,90 on Y96,60. Overcoming of the given mark will open road to Y98,00 (61,8 %). The nearest support is area Y93,00 (inside a day time line of support). Below possible falling to yesterday's low on Y91,90 and further to Friday's low on Y90,90.

Resistance 3: Chf1.1880
Resistance 2: Chf1.1780
Resistance 1: Chf1.1700
Current price: Chf1.1632
Support 1: Chf1.1530
Support 2: Chf1.1480
Support 3: Chf1.1420
Comments: The pair bargains in the field of the days of levels reached in last some. The line of a trend from July 17 acts as the nearest support (Chf1,1530, the given mark also is area of a yesterday's low). Overcoming of the given mark will open road to Friday's low on Chf1,1480 and further to Chf 1.1420 (area of September 11 high). The nearest resistance is located in the field of a yesterday's high, and also area of October 22-23 high on Chf1.1700, above is located the peak on October 21 2007 on Chf1.1780. Overcoming of the given mark will open road to Chf1.1880/Chf1,1900 (area of October 2007 high).

Resistance 3: $1.6350
Resistance 2: $1.6040
Resistance 1: $1.5920
Current price: $1.566
Support 1: $1.5260
Support 2: $1.5150
Support 3: $1.4850
Comments: The pound remains within the limits of yesterday's levels. The nearest support - area of six years low on $1,5260. Overcoming of the given mark will open road to $1,5150 (area of July 2002 low) and further to $1,4850 (area of October 2001 high). The nearest resistance - $1,5920 (61,8 % of Friday falling). Above there is a chance of return to $1,6040 (area of Thursday's low) and further to $1,6350 (area of Thursday's high).

Resistance 3:$1.2740
Resistance 2: $1.2690
Resistance 1: $1.2585
Current price: $1.2576
Support 1: $1.2330
Support 2: $1.2200
Support 3: $1.2160
Comments: The rate has tested a yesterday's low which at present is the nearest support ($1,2330). Overcoming of the given mark will open road to $1.2200. Below there is a probability of falling to $1,2160 (100 % of a projection of decrease $1.4862/1.3258). Intermediate resistance is the level $1,2585 (area of a yesterday's low).Above is located the mark $1,2690 (area of a yesterday's high) which overcoming will open road to $1,2740 (area of October 22 and 23 low).

High Low Close
EUR/USD 1.2684 1.2330 1.2455
USD/JPY 94.47 91.88 92.84
GBP/USD 1.5878 1.5276 1.5545
USD/CHF 1.1712 1.1516 1.1568
EUR/JPY 119.38 113.59 115.68
EUR/GBP 0.8123 0.7942 0.8013
GBP/JPY 149.86 140.61 144.34
GBP/CHF 1.8468 1.7708 1.7981

Change % Change Last
Nikkei -486.18 -6.40% 7,162.90
Topix -59.65 -7.40% 746.46
FTSE -30.77 -0.79% 3,852.59
DAX +38.97 +0.91% 4,334.64
CAC -126.44 -3.96% 3,067.35
DOW -203.18 -2.42% 8,175.77
NASDAQ -46.13 -2.97% 1,505.90
S&P 500 -27.85 -3.18% 848.92
10YR -6/32 102 11/32 Yield: 3.73%
10yr Note ; +0.3200 +0.087% 3.729%
NYMEX Crude Oil -0.93 -1.45% 63.22
Gold +12.90 +1.77% 742.50

07:10 Germany Gfk Consumer Confidence Survey (November) 1.5 1.8
11:00 UK CBI retail sales volume balance (October) -37% -27%
14:00 USA Consumer confidence (October) 53.0 59.8
21:45 New Zealand Trade Balance (September) -750M
23:50 Japan Industrial Production (YoY) (September) -6,9%
23:50 Japan Industrial Production (MoM) (September) -3,5%