By Greg Peel

The Dow rose 93 points or 0.7% while the S&P gained a more impressive 1.1% to 1353 and the Nasdaq added 1.4%.

What correction? As of last night the S&P 500 had rallied back 7% from its June low, having fallen 7% in the correction from April. Falls are measured from the top and rallies from the bottom however, so we're still 10 points or 0.7% shy of pretending nothing ever happened.

Last night in Europe the ECB raised its cash rate by 25bps to 1.5% as was anticipated and hinted that another rate rise could be needed in the next few months. Given the lack of surprise, the most important eurozone news was that the ECB has suspended its collateral rules such that Portuguese debt, since downgraded to junk by Moody's, can still be accepted as collateral against loans to Portugal from the central bank. The ECB had previously done the same for Greece.

The news was enough to send the euro a bit higher, although the rate rise had already been factored in. But when the sun rose over Manhattan there was much excitement in store.

Economists had expected the ADP private sector employment report to show an increase of 70k jobs, so when ADP announced 157k jobs were added all hell broke loose. At the end of the day, any true US recovery requires a reduction in unemployment. The chocolate on the cappuccino was a 14,000 drop in last week's new jobless claims. Economist forecasts for tonight's official non-farm payrolls number had been for an addition of 80-90k jobs, but now all forecasts have been revised with 125k something of an average. Late in the day however, Deutsche Bank raised its estimate to 175k.

Wall Street has a habit of setting itself up for disappointment when it comes to the jobs number, but right now it seems everything is going the right way. The US consumer drives 75% of the US economy, and strong employment feeds into consumer spending. Unemployment is still around the 9% level officially (and around 16% counting those who have given up) yet last night's June same-store sales results from America's largest chains showed the biggest monthly jump since February 2004.

The 6.5% average increase compared to expectations of 4.9% was a gobsmacking result. Economists pointed to hot weather driving sales of everything from air conditioners to bikinis and a drop in the price of gasoline encouraging spending, as they looked for an excuse, but traders sent the S&P Retail index up 2.7%.

The bowser relief may, nevertheless, be temporary. There is a certain irony in stronger economic data sending up crude oil prices given high oil prices then act as a dampener on the economy. But while so far this week's trading has been all about getting back into stocks, last night the commodities funds clearly decided it was time to open the floodgates as well. Brent crude jumped a whopping US$4.97 to US$118.59/bbl while West Texas, held back by a report showing higher inventories than expected, rose US$2.14 to US$98.79/bbl. The Brent-WTI spread is back at US$20.

And they didn't muck around down the road at the LME either. Copper is on a tear, boosted by easing global economic fears, strikes in Chile and Indonesia, expectations of Chinese restocking, analyst forecast upgrades and mounting strong data, such as US jobs. Copper rose 2.5% last night in a session which saw all the metals up 1-3%.

Commodity prices were not getting much support from the US dollar which was only 0.15% weaker on its index to 74.91. Gold's had a solid few days, so it only rallied US$3.30 to US$1532.70/oz and silver limped up 1.5%.