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The U.S. stock market is up sharply today, as traders are feeling more optimistic about the global recovery. Notably, China reported stronger-than-expected second-quarter GDP figures. The news that China’s GDP advanced 9.5% for the period, suggests that recent efforts to raise interest rates have not derailed growth. The Asian markets closed higher, with the Shanghai Composite and Hang Seng up better than 1% overnight.

Meanwhile, the sentiment in Europe also improved, in part due to China’s report but also on some encouraging economic data released in Europe. Most of the bourses opened up higher and rallied into the close. There was notable strength on the German DAX, which ended up better than 1%. The euro has reversed its slide against the dollar, and is now at $1.42, moving above the widely watched $1.40 support level. The move may reflect better sentiment in Europe, but also a weaker dollar today.

In the U.S. Traders were encouraged by some comments from Fed Chairman Ben S. Bernanke. The Fed is still committed to loose monetary policy. But it is unclear if that will include a third round of asset purchases. Today’s equity rally has not helped the Treasury markets. Investors, looking for a bit more risk, are selling U.S. bonds, driving the yield on the 10-year note up to 2.95%.

The commodity markets are rallying a bit. The price of crude oil is up better than 1%, now at $98.62 per barrel. The move reflects a better demand outlook, as well as a recent inventory report from the Energy Information Administration. Gold is trading near new high-ground at $1,585 per ounce. More impressive is the 5% jump in silver. The move is helping miners. For example Silver Wheaton (SLW) is up sharply.

Meanwhile, earnings are rolling in. Capital One Financial (COF) posted second-quarter profits that beat consensus. But news of a stock offering is sending the stock lower. In merger and acquisition news, Electronic Arts (ERTS) has agreed to purchase PopCap Games a private company that manufactures digital offerings.

As we pass the noon hour in New York, the major market averages are just off their highs. The Dow Jones Industrial Average is up 133 points (1.07%); the S&P 500 Index is gaining 15 points (1.14%), and the NASDAQ, showing leadership, is ahead by 39 points (1.41%). Market breadth is positive, as advancers are swamping decliners. Leadership can be seen in the usual places; the basic materials, conglomerates, and energy sectors. As has been the case, the utilities are lagging the broad market. Stocks moving higher include Clean Energy Fuels (CLNE), GT Solar (SOLR), LinkedIn (LNKD), and Southern Peru Copper (SCCO). Names slipping in price include Adtran (ADTN), Ebix (EBIX), and Validus (VR).

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.