By Greg Peel

The Dow rose 54 points or 0.4% while the S&P gained 0.5% to 1790 and the Nasdaq added 0.3%.

Yesterday's bounce-back on Bridge Street, supported by further strength on Wall Street overnight, was no less surprising than Wednesday's shake-out. When a shake-out is on, best just to stand aside and wait for cheaper entry prices. The banks led the market down on Wednesday and were among the leading sectors yesterday, along with materials and consumer discretionary.

Bridge Street was unaffected by the release of Japan's September quarter GDP, which was good news and bad news. The good news is Japan's GDP expanded at an annualised rate of 1.9% when economists had expected 1.7%. The bad news is Japan recorded 3.8% annualised growth in the June quarter and 4.3% growth in March. The euphoria that surrounded the initial implementation of Abenomics, and the subsequent plunge in the yen, has now dissipated. Japan's economy relies on exports, and exports marked a 0.6% quarter on quarter fall to September from June.

The eurozone is in a similar boat. European PMIs have been improving healthily over the past months, even moving into expansion territory, suggesting the eurozone economy was finally dragging itself out of the mire. But the September quarter GDP result showed only 0.4% annualised growth, down from 1.2% in June. The second and third largest economies in the bloc ? France and Italy ? posted annualised contraction. Germany matched forecasts with 1.3% growth, but this is down from June's 2.9%.

The warning bells went off in Europe when the eurozone estimate of October CPI came in at a paltry 0.7%. The ECB responded by cutting its cash rate to 0.25% from 0.50%. Mario Draghi declared in 2012 he would do "whatever it takes". Up until last week he has not had to do anything new, but that time may be approaching.

GDP news took a back seat on Wall Street as all attention focused on the testimony of the Fed chair nominee, Janet Yellen.

Wall Street expected Yellen to walk into the Senate committee hearing and release the doves. She did not disappoint. While providing no specific timetable or guidance on QE tapering, her pre-released written testimony sufficiently suggested tapering is not about to begin anytime soon. These are snippets from that release:

"Today the economy is significantly stronger and continues to improve.

"We have made good progress, but we have farther to go to regain the ground lost in the crisis and the recession. Unemployment is down from a peak of 10%, but at 7.3% in October, it is still too high, reflecting a labor market and economy performing far short of their potential.

"At the same time, inflation has been running below the Federal Reserve's goal of 2% and is expected to continue to do so for some time.

"For these reasons, the Federal Reserve is using its monetary policy tools to promote a more robust recovery. A strong recovery will ultimately enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools such as asset purchases. I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy.

"Our country has come a long way since the dark days of the financial crisis, but we have farther to go. Likewise, I believe the Federal Reserve has made significant progress toward its goals but has more work to do."

On the strength of that confirmation, Wall Street again pushed higher into blue sky. Yellen did not surprise, so there was no need for a euphoric surge. The Dow would nevertheless have been much stronger if not for a very weak quarterly result from Cisco, which saw its shares plunge 11%. Wal-Mart also reported last night, but an in-line result affected no share price response.

Nor was there any need for the US dollar to plunge on Yellen's dovish confirmation. Indeed, the weak GDP results in Japan and Europe ensured the dollar index rose slightly to 80.99. The Aussie has fallen slightly to US$0.9322. Gold told the tale however, with December tapering now less likely, in rising US$13.00 to US$1287.50/oz.

Copper steadied last night after Wednesday night's fall and all base metal moves were small and mixed.

Oil was impacted by two reports last night. The US weekly inventory report showed an eighth consecutive rise, and West Texas fell US6c to US$93.82/bbl. The monthly OPEC report showed production fell for a third straight month. Brent rose US$1.35 to US$108.24/bbl on the new January delivery front month. The Brent-WTI gap continues to widen.

Spot iron ore rose US50c to US$136.60/t.

The SPI Overnight rose 8 points.

Lend Lease ((LLC)), Automotive Holdings ((AHE)) and Perseus Mining ((PRU)) are among today's AGM highlights.

Tonight sees the official release of the eurozone CPI for October, following on from the earlier flash estimate of 0.7% annualised that spooked the world.