The market is up 61. Our futures were up 50 this morning with the Dow Jones up 152 on below average volume.

The Dow was up 154 at best and down 13 a worst following a “bogus” Associated Press tweet about two explosions at the White House. At one point the Dow sold off 15pts but recovered it all in a matter of minutes. Best sectors — consumer discretionary, healthcare, financials. Worst sectors — materials, utilities.

European markets posted their biggest intraday gains in more than seven months on a good Spanish bond auction. Italian 10-year bond yields went under 4% and Spanish bond yields are approaching 4.0%. Italian 10-year bond yield down 11bpts to 3.94% this is the first time the yield has been below 4.00% since 2010. The STOXX Europe 600 Insurance index was up 3.7% and European banks were up 3.3%.

Eurozone PMI numbers including Germany’s, which were a bit below expectations, created further speculation that the ECB will cut interest rates at its next meeting. Eurozone PMI is still below 50 implying economic contraction.

European Commission President Jose Manuel Barroso was quoted as saying the policy of austerity “has reached its limits”.

Metals mixed – Copper down 0.93%, Nickel down 1.12%, Zinc down 0.11%, Aluminium up 0.15%. Spot iron ore was down $1.60 to $136.40.

  • The Australian CPI Index number this morning for the first quarter rose 0.4% and was up 2.5% for the year to March. This was below expectations of +0.6% in the March quarter and +2.7% for the year. This increases the chance for a rate cut. The banks are very strong again today on the back of the number.
  • Virgin Australia (VAH) — Singapore Airlines is looking to acquire an additional 9.9% stake in the airline for $122.6 million. The company will buy 255.5 million shares at 48c per share. The stake purchase needs the approval of Australia’s Foreign Investment Review Board. VAH is up 1.1% to 46c.
  • Billabong (BBG) — Have announced the extension of exclusive takeover talks with the Sycamore Partners for a further 10 days at its request. The company said “Billabong and the Sycamore Consortium agree that both have been working constructively and with the utmost cooperation to progress the Quality of Earnings report and the potential transaction. The exclusive talks will now conclude on Wednesday May 8. The offer is 60c, down from 110c and a 330c bid by TPG last year. BBS is down 1.04% to 47.5c.
  • Brambles (BXB) – Has put out a third-quarter trading update. Reported sales revenue was up 4% to $US4.35 billion for the nine months ended March 31, 2013. Despite the challenges in RPCs and Recall the company expects underlying profit to be within the guidance range provided in February 2013 of $US1.030bn-$US1.060 billion. The stock is up small this morning. BXB is up 1.5% to 878c.