STOCKS RALLY, S&P CLOSES AT ALL-TIME HIGH: Here's What You Need To Know

First, the scoreboard:

• Dow: 15,460.9, +169.3, +1.1%
• S&P 500: 1,675.0, +22.4, +1.3%
• NASDAQ: 3,578.3, +57.5, +1.6%

And now, the top stories:

• Stocks had a nice big up-day with the S&P 500 closing at an all-time high. The previous all-time closing high was 1,669.1 on May 21, 2013. The current all-time intraday high was 1,687.1 on May 22.
• The rally actually started around an hour after yesterday's close. Speaking at the NBER conference in Cambridge, Mass., Federal Reserve Chairman Ben Bernanke offered some answers to some burning questions about the current state of monetary policy. He said that even though the Fed may begin tapering its quantitative easing program soon, interest rates will still be pinned at current ultra-low levels for a long time. He also noted that the unemployment rate – a key indicator that will determine the future path of Fed monetary policy – probably understates the weakness in the U.S. labor market.
• Immediately after these comments, U.S. stock market futures spiked, the dollar sunk, and gold rallied.
• Initial jobless jumped to 360,000 this week, which was a bit higher than the 340,000 expected by economists. However, economist Jim O'Sullivan warned that we should ignore this report because it tends to be a noisy week. "This is likely to be one of those weeks, due to the challenge of seasonally adjusting for annual plant shutdowns in the auto industry," said O'Sullivan. "The bias has generally been downward in the first week of the annual shutdowns in recent years, with the seasonal factors over-adjusting for shutdown-related filings. "
• The U.S. reported a $116.5 billion budget surplus in June, the biggest surplus since April 2008. Revenue climbed 10.2% to $286.6 billion, while outlays plunged 46.8% to $170.1 billion.
• "Some of the swing in the budget in today’s report for June will be exaggerated by calendar quirks and a payment from Fannie Mae, but the trend is clearly toward improvement," said High Frequency Economics' Jim O'Sullivan before the statement was released. "The deficit has dropped to an estimated 4.4% of GDP in the past four quarters from 8.0% in the previous four quarters and more than 10% at the peak in 2009. The downtrend has reflected strength in revenues as well as weakness in outlays. Some of the strength in revenues is the result of higher tax rates, but the data also suggest that GDP may have been undercounted."
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