Some explanation on today's market movement

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NEW YORK (CNNMoney.com) -- A stock rally gained momentum Thursday, with the major indexes hitting highs for the day in the last minutes of trade, as concerns over Europe's debt crisis and its impact on the global recovery were calmed by a sharp boost in Chinese exports and a strengthening euro.

The Dow Jones industrial average (INDU) finished up 273 points, or 2.8%. The Dow closed above 10,000 for the first time this week. Shares of Caterpillar (CAT, Fortune 500), Chevron (CVX, Fortune 500) and American Express (AXP, Fortune 500) led the rally, rising about 5%.

The S&P 500 index (SPX) gained 31 points, nearly 3%. That was thanks to a bounce in energy shares that dragged on the market during the previous session. Anadarko Petroleum (APC, Fortune 500) climbed 12.4% and Baker Hughes (BHI, Fortune 500) was up 10.6%.

The Nasdaq composite (COMP) rose 60 points, or 2.8%.

Stocks finished in the red Wednesday, failing to sustain session gains in the last hour of trade, as investors dumped energy stocks amid ongoing worries about BP's ability to weather the costs of the Gulf oil spill.

But the market rebounded Thursday as investors digested a report verifying a nearly 50% surge in Chinese exports in May compared to a year earlier and a stronger euro after European Central Bank President Jean-Claude Trichet said the central bank would maintain its monetary policy.

Euro leaps vs. dollar

"Trichet is indicating that the European economy will not falter and will not be problematic to the global economic recovery," said Peter Cardillo, chief market economist at Avalon Partners.

The ECB president's comments helped push the euro to hold above $1.20 for the first time in a week, and as it spiked as high as 1.4% to stand at $1.2142.

"We're seeing the euro stabilize, and while that doesn't mean the crisis is over, there's less fear in the market," Cardillo said. "The easing of that fear is what's responsible for the stampede."

Stocks will likely remain in a tight range as long as the euro maintains its strength and boosts investor confidence, said Fred Dickson, chief market strategist at D.A. Davidson & Co.

As the concerns over Europe's debt crisis continue to subside, Cardillo said investors appetite for risk will resume and the focus will shift to strong U.S. economic data.

Economy: A government report showed that jobless claims fell 3,000 to 456,000 last week. Economists surveyed by Briefing.com expected filings to slide to 450,000. Meanwhile, the number of Americans filing for ongoing unemployment insurance sank by 255,000 to the lowest level since December 2008.

Double dip recession: What are the odds?

The Commerce Department said the trade deficit increased 0.6% in April, widening to $40.3 billion from a downwardly revised $40.0 billion the previous month. That was lower than the $41.3 billion that analysts surveyed by Briefing.com expected.

The Treasury reported the 20th consecutive monthly deficit, with a $136 billion shortfall in its May budget. Economists were expecting the government's budget to be $142 billion in the red during the month.

Companies: BP (BP) said Thursday, day 52 of the oil spill, that it "is not aware of any reason" for the 16% plunge in its stock price during the previous day's trading. The company's stock rebounded Thursday, rising as much as 13%.

Shares of ARM Holdings (ARMH) spiked as much as 11% on revived speculation that Apple (AAPL, Fortune 500) would bid for the mobile chip designer.

While most bank shares were up with the broader market, Goldman Sachs' (GS, Fortune 500) stock plunged more than 3% to a new 52-week low as investors digested reports that the Securities and Exchange Commission is investigating a mortgage investment Goldman bundled and sold in 2006.

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A bit more explanation on T-note yield and market

Simple answer? corporate bonds are much like credit cards, as the risk of default increases the rates rise and prices fall. If the pool of risk ( or bonds out there) sees an increase in defaults than rates will rise for all , much like a risk pool in insurance. If corporates are tanking it is ominous for stocks ,as bonds have priority over common stock in the event of bankruptcy.

Treasuries on the other hand have essentially no default risk and usually trade almost completely independent of corporates. Treasuries , if u look back in time , have almost always rallied ( down in yield) PRIOR to big downdrafts in stocks. Look at late 2007, the treasury market rallied to no end a good 5 or 6 months prior to the stock market crash. Call it what you want, Frontrunning? Coincidence? Smart Money moving out of equities because they see something nobody else does? But when Treasuries make big moves to lower yields when everything else is quiet? thats when it is time to take note something is up. Nobody wants to buy treasuries at such low yields like the 3 year at 1.2% today , they do it when things get bad.

You are very astute to notice the change in rate structure. One can do all the reasoning and studying of fundamentals they can to make sense. Markets however tend to give out answers first, and reasons for those answers later.

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