By Greg Peel

The Dow closed down 35 points, or 0.3%, while the S&P ticked up a point to 1520 as the Nasdaq gained 0.3%.

The US broad market S&P 500 index hit a new post-GFC intraday high early in the session last night at 1524 before topping out. Stocks pulled back thereafter, but the S&P remains only around 3% from its all-time high, while the Dow needs only 1.3%. Yesterday, the Australian ASX 200 breached 5000 for the first time in two years, closing at 5003. It's been a long awaited retracement, and all we need to reach the all-time high now is another... um... 36%.

We can thank Ben Bernanke for the divergence.

The level of 5000 proved stiff resistance on the way up to the peak pre-GFC, provided stiff support before being broken on the way down in 2008, and has proven an impenetrable barrier no less than five times between 2008 and yesterday. To clearly break this level to the upside would be to break out of the thick jungle and into the open field. Can we do it? Well that depends on whether we get this pullback everyone's talking about. As one fund manager pointed out last night, those calling for a pullback are simply those who have missed out on the rally and want to get long.

Some stats, courtesy of Dow Jones: Since the 1920s the US broad market has run for an average 49 days before a 5% pullback, and 161 days before a 10% pullback. In the current rally the S&P 500 has run 60 days without a 5% pullback and 342 days without a 10% pullback.

For the ASX 200 to push on from its 5000 breach today we would first have to ignore Wall Street's session overnight, although recently that has not been beyond the realms. We would nevertheless need a repeat of yesterday's suite of positive earnings results, and for that there are plenty of contenders. Rio Tinto ((RIO)) is one. Wesfarmers ((WES)) is another, along with ASX ((ASX)), Mirvac ((MGR)), Downer EDI ((DOW)) and Billabong ((BBG)), among others.

There was no particular impetus to Wall Street's initial rise and subsequent fall last night, just as there has not been much rhyme or reason in moves over the past week or so. President Obama's call to lift the US minimum wage from US$7.25/hr to US$9.00/hr in his State of Union Address has sparked a good deal of debate, particularly among economists. While it is positive to give a lot of Americans more money to spend, it is not so positive if small businesses are forced to retrench or at least not hire workers given the additional cost. Meanwhile, the 0.1% rise in January retail sales reported last night was weak but right on expectation, given the anticipated impact of the payroll tax hike.

Iran agreed last night to return to the negotiating table with the UN Security Council with regard to its nuclear progress. The capitulation follows Obama's harsh words on the subject yesterday, but is assumed to more realistically be as a result of the impact of imposed sanctions. Iran is now ready to install sophisticated enrichment devices at its nuclear facility but experts remain confident the capacity to produce the level of enrichment required for a warhead ? thus likely prompting a pre-emptive strike from Israel ? is still some way off.

There has been an Iran premium built into the price of oil for some time, albeit the oils did not post much of a response to any supposed easing of tensions last night. Brent was up US34c to US$118.72//bbl and West Texas down US38c to US$97.13/bbl. Gold fell US$9.40 to US$1641.30/oz despite the US dollar index remaining steady at 80.09.

The Aussie joined in the positive mood Downunder yesterday in rising 0.4% to US$1.0344. Base metals were mixed overnight on smallish moves.

The SPI Overnight rose 2 points.

Today's local earnings report highlights have been noted above. Today will also see the release of Japan's December quarter GDP result and the Bank of Japan will also release a monthly policy statement. It's a scheduled BoJ meeting but the timing is interesting, coming, as it so happens, between yesterday's bungled attempt by the G7 to annunciate the group's position on currency volatility (ie, the yen) and the G20 finance ministers meeting beginning Friday at which the Currency War is expected to be a hot topic.

The eurozone will release its December quarter GDP result tonight.

Rudi will appear on Sky Business at noon and again at 7pm for the Switzer Report.

Please ladies ? no more cards.