By Greg Peel

The Dow rose 135 points or 1.1% while the S&P gained 1.6% to 1315 and the Nasdaq surged 2.5%.

There was no new news from Europe last night, with politicians and economists still both generally endorsing the view Greece should remain in the eurozone, while at the same time preparing for an exit. Opinions as to what might transpire from a Greek exit range from contagion disaster to not so bad, with the latter view suggesting two years of market preparation for such an event will stymie any major fallout. The latter camp also points to a big disparity between Greece and the other PIIGS which have much lower deficit to GDP ratios and have achieved a lot with austerity policies to date.

Yet still Spanish and Italian bond yields keep rising, with Spain now at 6.25% in the tens and Italy equivalently at 5.75%.

The more positive view, or perhaps we should say the less negative view, was apparent last night as US stocks opened higher from the bell and continued to push higher all session. There was at least one exception ? Facebook fell 11%. The suggestion is that funds had flowed out of Apple, which had fallen 15% from its peak, into the Facebook IPO, and now disappointment has sent them all back the other way again. Facebook is yet to enter an index, but Apple dominates the Nasdaq, and Apple's 6% rally last night drove the index to its best session of 2012.

Not that we really care that much in Australia, but the US tech sector is an important element of the twenty-first century US economy and of stock market sentiment.

It is the US economy that is in focus on Wall Street, and last night smacked of a sufficient feeling of "oversold" on Europe's latest woes with valuations in solid American companies looking cheap. Adding to the mix was the release of the Chicago Fed national activity index that showed a rise to plus 0.11 in April from minus 0.44 in March. Don't mention the word "decoupled", but a lot of US fund managers seem to think that America is quite simply the best bet in a bad bunch.

Beijing has also proved helpful over the last 24 hours, with Chinese premier Wen Jiaboa calling for more priority being given to boosting China's slowing economic growth. While Beijing has a history of doing things in a very measured and gradual way, Wen's comments were at least enough to rescue the Australian bourse from the wobbles yesterday afternoon, despite every man and is dog having assumed further Chinese stimulus all along. Traders who bought late will be feeling quite happy this morning.

The question is, of course: is this just a typical, temporary relief rally following an extended sharp drop, or was there really not that much to worry about in the first place? The risky bet is to take the latter view, and realistically we are now in a bit of a euro-news vacuum until the Greek election, which provides the environment for some supposed bargain hunting. The EU leaders will informally meet on Wednesday where it is expected Francois Hollande will push for the introduction of a eurozone bond. It might have been a nice idea from the outset, and will be a good idea down the track, but right now aggregating a lot of junk bonds is not all that palatable.

Markets elsewhere were not recipients of the same bounce enthusiasm as US stocks, perhaps with the exception of oil. Brent crude jumped US$2.18 to US$109.32/bbl and West Texas US$1.33 to US$92.81/bbl, with the US dollar index falling only a tad to 80.96. Gold was as good as steady at US$1593.40/oz and base metals were again mixed on small moves.

The Aussie has had a decent bounce since Friday nevertheless, jumping 0.9% to US$0.9910 in a brief burst of "risk on". The US ten-year bond yield ticked up slightly to 1.73% and the VIX fell 12% to 22.

The SPI Overnight closed up 33 points or 0.8%.

Enjoy it while it lasts, but markets never ultimately turn on one bounce, and there's no change to the climate of uncertainty. There'll be more volatility to come.

Graincorp ((GNC)) will release its interim result today.

All