The U.S. markets are rebounding after a volatile morning. Investors are reacting to Fed Chairman Bernanke's testimony and a record low reading on new home sales. Bernanke said the Fed will need to keep rates low to keep the economic rebound afloat. That pushed the dollar lower and gave commodities a boost. Yet it's not helping gold prices with gold futures down over $4 to $1,098 an ounce. Crude oil is up 1% near $79.70 a barrel.

It was a relatively quiet day in foreign markets. In Asia stocks were mixed. The Japanese NIKKEI lost 1.4%. The Hong Kong Hang Seng fell 0.75%. The Chinese Shanghai ended a two-day retreat by overcoming a 1% decline this morning to close up 1.3%. In Europe stocks spent the session churning sideways on either side of the unchanged level. Labor unions in Greece were on strike for the second day in a row as they protest budget cuts demanded by EU regulators. This sent interest rates and credit default swaps on Greece bonds and debt higher. At the end of the day the German DAX rose 0.2%. The French CAC-40 rose 0.23%. The English FTSE rallied 0.5%.

The market's main focus today was Federal Reserve Chairman Ben Bernanke's semi-annual report to Congress. His comments to the House Financial Services Committee were generally positive and he reinforced the Fed's stance to keep interest rates low for the foreseeable future to help keep the rebound alive. Unfortunately, Ben's optimism was almost overshadowed by drastically low new home sales.

The Commerce Department reported that January's new home sales plunged -11.2% to an all-time record low pace of 309,000 homes. Economists were actually expecting a +5% rise from December's pace of 342,000. There has been some speculation that the decline was exacerbated by severe winter storms but new home sales have fallen for three months in a row in spite of government support. The Northeast region saw the biggest decline of -35%. Sales in the West fell 12% and the South fell 10%. The Midwest area actually saw a gain of 2.1%. The sudden drop in demand pushed the median sale price to $203,500, which is a 5.6% plunge from December's prices. The glut of foreclosed homes on the market is drawing demand away from new homes.

In other news the SEC made headlines with a controversial decision on shorting stocks. The Securities and Exchange Commission voted 3-2 to change the rules on short selling. The new rule creates a "circuit breaker" that kicks in after a stock has fallen 10% or more in one session. Once the circuit breaker is on traders can only short sell a stock on an uptick. This new version of the uptick rule applies for the rest of the day and the next trading session once the circuit break was applied. Elsewhere in the news the Senate voted 70-28 to pass a new jobs bill that gets sent back to the House. Lawmakers will have to decide whether to accept it or try and merge it with the House's jobs bill they passed in December.

The market's bounce appears to have stalled during the lunch hour. The S&P 500 is up 0.8% and back above the 1100 level. The NASDAQ composite is up 1.1% with a move toward 2240. The best performers today are the banks (+2%), the semiconductors (+2.4%), biotechs (+1.3%), insurance (+1.3%), and the retailers (+1.6%). The worst performers are oil services (-0.4%) and the homebuilders (-0.6%).

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A quick glance at the OptionInvestor.com play list reveals that CL is showing some relative strength with a new six-week high. AAPL is bouncing with a 2% gain and a move back above $200.