The Dow jumped more than 270 points to close solidly above 10,000 Thursday as encouraging economic data out of China and a soothing growth forecast from the European Central Bank once again whetted traders' appetite for risk. The dollar, Treasurys and gold fell, while oil prices topped $75 a barrel for the first time in nearly a month.

Having its third-best day of the year, the blue-chip Dow Jones Industrial Average ($INDU) added 273 points, or 2.8%, to close at 10,173. The broader S&P 500 ($INX) gained 31 points, or 3%, to 1,087. The tech-heavy Nasdaq Composite ($COMPX) rose 60 points, or 2.8%, to finish at 2,219.

But today's Street party hardly means the risk-trade is back on full blast, as one day in the market doesn't make a trend, cautioned John Stoltzfus, market strategist at Ticonderoga Securities.

"[Macroeconomics] ruled the markets -- at least for today -- as reports of economic growth around the world show the recovery process remains intact and is not too shabby in spite of the eurozone's problems," Stoltzfus wrote in a note to clients. " Nothing like throwing trillions at a global crisis in a concerted effort over an 18-month or so period to get things moving again."

China Plays a Starring Role

Sectors finely attuned to global demand such as energy and basic materials led the market higher following China's report that May exports jumped nearly 50% year-over-year after jumping 31% in April. Exports to the European Union rose to $25.9 billion in May from $22.3 billion in April. "The data show that the European debt crisis has had no negative impact yet on China's exports," wrote Ed Yardeni, president of Yardeni Research, in a note to clients.

In addition to China posting its highest export growth in six years, Japan said its economy expanded at an annualized 5% rate in the first quarter. Back in the U.S., initial jobless claims dropped last week and the federal government posted a smaller budget deficit in May.

Meanwhile, the ECB forecast the eurozone economy to grow by about 1% in 2010, better than its prior outlook of 0.8%. That helped boost the euro past the psychologically key $1.20 level.

Gold for August delivery fell $7.70 to $1,222.20 an ounce on the Comex division of the New York Mercantile Exchange (CME), while crude oil for July delivery added $1.10, or 1.5%, to $75.48 a barrel. The U.S. Dollar Index, which measures the buck against a trade-weighted basket of six major currencies, fell more than 1%, a large move in currency terms.

But...

David Rosenberg, the bearish chief economist and strategist at Canada's Gluskin Sheff, told clients to use Thursday's bounce to purge risk and cyclicality from their portfolios. " The charts don't lie and the trend lines in the major stock market averages have peaked out and rolled over," Rosenberg wrote.


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