YAHOO [BRIEFING.COM]: Stocks surged in high volume as market participants showed a willingness to take on risk after China conveyed a sense of confidence in Europe.

A positive tone permeated trade for the entire session. Many media sources said the initial catalyst was a denial by China about possible reviews of European debt holdings. Though that was interpreted as a vote of confidence in the continent that has caused so much concern related to systemic risk amid the persistent fiscal problems of Portugal, Italy, Ireland, Greece, and Spain, the news item doesn't do anything to change circumstances that currently face Europe.

Despite lingering concerns, Europe's major bourses still rallied in excess of 3% and the euro sprinted to a 1.5% gain against the greenback.

Domestic markets shared in the improved sentiment. The upbeat tone persisted for the entire session and even intensified into the close. In turn, the stock market settled at a session high with more than 98% of the names in the S&P 500 closing with a gain.

The strongest move was made by financials. They tacked on a collective gain of 4.5% as insurers and diversified financial services plays spiked.

Energy stocks were also especially strong. The sector climbed 4.2%. Higher oil prices helped as contracts for the energy component closed pit trade with a 4.2% gain at $74.50 per barrel. Oil prices have climbed more than 8% during the course of the past two sessions.

Advancing volume on the NYSE totaled almost 1.4 billion shares, which is close to the average total trading volume for the NYSE over the past 50 sessions. Advancing volume had a near 10-to-1 advantage over declining volume.

Though strong volume suggested that there was plenty of conviction behind the S&P 500's move above 1100, the stock market finds itself face-to-face with its 200-day moving average near 1105, which could be a point of significant resistance.

Treasuries had trouble this session. Specifically, the benchmark 10-year Note dropped more than one full point so that its yield climbed toward 3.35% after it had been down below 3.10% just two days ago. Treasuries failed to benefit from results of the latest 7-year Notes auction, which were generally solid.

Economic data got little more than a cursory mention amid this session's surge. The second estimate for first quarter GDP showed that the economy expanded at an annualized rate of 3.0%, which is down from the 3.2% increase that came with the advance estimate and below the 3.3% increase that many had come to expect.

Initial jobless claims for the week ended May 22 totaled 460,000, which is a bit above the 455,000 claims that had been widely expected. Continuing claims came down from 4.66 million to 4.61 million, which is in-line with what had been widely anticipated.

Oil extended its rebound from the prior session so that it closed pit trade with a 4.2% gain at $74.50 per barrel. Oil prices have climbed more than 8% during the course of the past two sessions.

Natural gas prices also fared well, despite a midmorning pullback that followed a slightly larger-than-expected build in weekly inventories. Futures contracts closed with natural gas priced 2.7% higher at $4.29 per MMBtu.

Gold failed to find any sustainable support. Instead, it spent most of the session mired in negative territory with a moderate loss. It finished pit trade with a 0.2% loss at $1211.52 per ounce.

Silver was stronger. It settled 0.8% higher at $18.46 per ounce.

Overall strength among commodities helped the CRB Commodity Index spike 1.9% in its best percentage gain in almost two months. The move also helped put the CRB up more than 3.5% for the past two sessions; that's its best back-to-back performance this year.

Advancing Sectors: Financials (+4.5%), Energy (+4.2%), Materials (+3.9%), Tech (+3.5%), Consumer Discretionary (+3.5%), Industrials (+3.3%), Telecom (+2.4%), Utilities (+2.1%), Consumer Staples (+1.9%), Health Care (+1.9%)
Declining Sectors: (None) DJ30 +284.54 NASDAQ +81.80 NQ100 +3.7% R2K +4.3% SP400 +3.8% SP500 +35.11 NASDAQ Adv/Vol/Dec 2371/2.33 bln/340 NYSE Adv/Vol/Dec 2879/1.42 bln/221