Market Talk

US stocks rally, as earnings reports from Lennar and Bed Bath & Beyond spark consumer discretionary, Treasury closes out a record week of bond sales, and Congress spars with Bernanke over the BofA-Merrill deal.

DJIA jumps 173 (2.1%) to 8472, S&P 500 rises 19 (2.1%) to 920, Nasdaq Comp gains 37 (2.1%) to 1830. S&P weathers early test of support around 900 level, which sparks rally. After the last two week’s selling, it’s all the excuse the pros need. Buying risky assets is back on elsewhere, too. Crude shoots up also, back over $70/barrel.

Weekly jobless claims unexpectedly rise, and final reading on 1Q GDP shows economy contracted at 5.5% rate, down from earlier 5.7% reading.

Video wrap’s here.

Fed Chairman Bernanke gets fairly trashed by Congress over his role in the Bank of America-Merrill Lynch merger. While he insists he never threatened CEO Ken Lewis’ job after Lewis balked about buying Merrill, several members of Congress give him the third degree, if only to give the folks back home their money’s worth.

But the real news concerning the Fed is the extension of most of its credit facilities past their original October expiration dates, to February 2010. One the one hand, it talked about winding them down, seeing less domestic demand, but on the other hand, well, it’s extending them past their original expiration dates. That ought to tell you something.

Treasury conducts what’s taken as a very successful auction of seven-year bonds. Bid-to-cover was better than recent auctions, and the indirect bid was also high, although as the Journal reported, the definition of indirect bidders was changed this month, allowing for more bidders to fall under that designation.