By Greg Peel

The Dow rose 78 points, or 0.5%, while the S&P gained 0.5% to 1689 and the Nasdaq was relatively flat.

Ben Bernanke spent a second day in front of Congress last night, this time answering questions. The chairman yet again remained on-message, even suggesting it was "way too early" to make a call on when tapering could begin. Given it's now late July, early assumptions from Wall Street that tapering would begin in September ? a view based on improving jobs data ? seem misconceived if the Fed believes it's too early at this stage.

This means more data flow will be needed to paint a clearer picture. After a little bit of a shock from a weak housing starts number on Wednesday, Wall Street was heartened last night by this month's Philadelphia Fed manufacturing index, which jumped to its highest level in almost two years at 19.8, up from 12.5 in June. The Philly index echoed a similarly positive release from neighbouring New York State earlier in the week.

I tend not to concentrate too much on US weekly new jobless claims, given often sharp week to week volatility that can move markets but is realistically just statistical noise around a trend. We can check in every now and again though to see how the trend is going, and last week claims totalled 334,000, below expectations. Last year was all about hoping to see that number fall under 400,000, which is roughly considered the line across which unemployment starts to fall. The claims trend is thus consistent with recent non-farm payroll results.

And so Wall Street can sail merrily on, knowing that good data are good for the stock market and bad data means more support from the Fed, which is good for the stock market. Quarterly earnings results to date have been mostly to the positive side, albeit concerns linger over revenue numbers that are failing to excite. Sceptics also point to the degree of forecast downgrading that occurred in the period leading up to result season, which makes it difficult for companies to disappoint even if earnings are uninspiring.

Last night Dow components Microsoft and Verizon nevertheless fell short with their results and suffered small share price falls. Google reported after the bell and disappointed, sending its shares down 4% in the aftermarket. But during the session Wall Street was more focused on Morgan Stanley's strong result, which saw its shares up 5%.

Morgan Stanley rounds out a very solid set of results from the big banks, with all of JPM, Wells, Citi, BofA and Goldman posting solid profit increases on the same period last year. MS even announced a share buyback. The financial sector led the S&P higher last night, and the rule of thumb is one can't have a true bull market unless financials are among the leadership group. Taper-talk has also now steepened the US yield curve, which positive for bank earnings ahead.

The Aussie suddenly seems to have become quite volatile in a tight range. Having jumped back up to over 92 on the release of the RBA minutes on Tuesday, which suggested the RBA may hold off on further rate cuts if the currency weakens further, it has now fallen back again, dropping 0.8% to US$0.9168 over 24 hours while the US dollar index was up 0.2% last night to 82.80.

We thus may have found and explanation for the range, and at the same time possibly discovered a perpetual motion machine. Aussie goes down, rate cut less likely, thus Aussie goes up, rate cut more likely, thus Aussie goes down...

Realistically, economists suggest the currency would have to fall to something like 85 before the RBA would truly become concerned about inflation.

Commodity markets were relatively quiet last night, with gold up US$7.60 to US$1283.70/oz, base metals all stronger but barely moving the dial, and the oils remaining persistently strong, with Brent up US15c to US$108.76 and West Texas up US$1.60 to US$108.08/bbl. The Brent-WTI spread is now inside a dollar, although we're presently trading a front month mismatch. But on a Sep-Sep basis, we're still inside the dollar. The spread is dead.

There's no stopping iron ore at the moment, with spot adding another US$1.50 to US$131.90/t.

The SPI Overnight is up 20 points, or 0.4%.

The futures market has been quite optimistic all week, to little avail. The ASX 200 has come to a grinding halt. Today's Friday, which probably means we'll open higher and then drift off on indifference towards the close.

Santos ((STO)) will release its production report today, while on Sunday Japan will hold its all-important upper house election, which is expected to cement Abenomics and allow for further fiscal reform measures to support the monetary tsunami.

The Trading & Investing Expo will be held in Sydney today and tomorrow, from 10am to 5pm each day at the Exhibition Centre, Darling Harbour. Rudi will be manning a stand and also presenting a seminar at 3.30pm each day, and both Rudi and I will be on deck tomorrow.

Come along and say hi.