STOCKS RALLY, BONDS TUMBLE: Here's What You Need To Know (DIA, SPY, QQQ)

Sam Ro | May 28, 2013, 4:00 PM | 451 | The Dow was up by as much as 214 points this morning.  While it shed most of those gains, the stock market nevertheless closed in the black today, breaking a three-day losing streak.

First the scoreboard:

Dow: 15,409, +106.2 pts, +0.6%
S&P 500: 1,660, +10.4 pts, +0.6%
NASDAQ: 3,488, +29.7 pts, +0.8%

And now the top stories:

Investors and traders returned from their three-day weekends and hit the ground buying.  And there was some good economic news to help fuel the rally.The S&P Case-Shiller home price index jumped 10.9% year-over-year, beating expectations for a 10.2% rise.  This was the fast pace of price gains since April 2006.  Only New York City and Minneapolis saw prices fall during the period.  "Rising home prices will encourage more construction, as builders and buyers become more confident that the assets will increase in value," said Deutsche Bank's Joe LaVorgna. "This is the direct effect of rising home prices, and we are seeing this in the employment data"However, economist Robert Shiller noted that foreclosure sales volume has been falling, which may be creating the illusion price growth that isn't there.The Conference Board's May consumer confidence index blew away expectations, surging to 76.2 from April's reading of 69.0.  Economists were looking for a reading of 71.2.  The May reading was a five-year high. "The positive tone of this report was quite encouraging as it suggests that US households are looking well beyond the current economic setback caused by fiscal retrenchment in the form of higher personal taxes and falling government spending," said TD Securities' Millan Mulraine. "Instead, confidence is being buoyed by the steady progress in housing market activity and strengthening private sector fundamentals more generally."Two regional manufacturing surveys showed signs of improvement. At least, things appear to be getting less bad in the sector.  The Richmond Fed Manufacturing index climbed to -2 in May from -6 in April.  The Dallas Fed Manufacturing index improved to -10.6 from -15.6 a month ago, however the May reading was just shy of the -10.0 level economists were looking for.Bonds tumbled amid the strong econmoic news and the stock market rally. The sell-off caused the 10-year Treasury note yeild to surge to its highest levels of the year.Even with stocks rallying passed most forecasters expectations, some Wall Street strategists are keeping their once-bullish, now-bearish targets on the S&P 500 unchanged.  Citi's Tobias Levkovich has a 1,615 year-end target on the S&P 500. His proprietary Panic/Euphoria model is approaching euphoria, which means near-term expected returns are now unattractive.Don't Miss: These Skyscrapers Predicted History's Worst Financial Crises >Please Note: Business Insider will never share your information with any other companies. You also have the ability to unsubscribe from these newsletters at any time simply by following the unsubscribe link located at the bottom of each email

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