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U.S. equity markets rose for the second straight day as the Dow and Nasdaq posted 1% gains and the S&P 500 ended higher by 0.8% to finish the week above the 1,100 mark. Two solid days in a row reignited traders’ demand for risky securities which sent gold down more than $7/oz. and pushed up the benchmark 10 Year T-Bond yield to just under 3.00%. Today’s boost came after positive news from two American bellwethers; GE hiked its quarterly dividend by 20% which helped to alleviate fears over its capital division while Verizon upped its sentiment for the rest of 2010 after beating the Street’s earnings estimates but slipping on revenues. These reports helped to push up both of the Dow components by more than 3.5% on the day. “Expectations for a double-dip have passed somewhat. When you start looking at the robust earnings, (it’s clear) we’re going to have continued growth,” said Steve Goldman, market strategist at Weeden & Co in Greenwich, Connecticut. In addition to U.S. earnings season, European bank stress tests weighed on the markets; only 9 of the 91 banks failed the test leaving many to wonder if the program was too easy for most banks and if a more rigorous test would be needed to truly test the health of the European banking system.  “The stress tests do not seem that stressful and it is looking more like a political whitewash rather than a genuine attempt to reassure financial markets that euro zone banks have balance sheets that could really withstand sovereign risk shocks,” said Neil MacKinnon, global macro strategist at VTB Capital. [click to continue…]

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