· Market Update – another quiet session w/people focusing more on soccer than the markets

· Market Update – another quiet session w/people focusing more on soccer than the markets; mixed headlines, w/positive news on the sovereign front (Spain auction, IMF/Greece comments) offset by mixed corporate headlines (STLD, TOL); technicals still dominating (200day on sp being watched more than fundamental headlines); things only going to get more technical driven heading into rebal & quad witch tomorrow.  The overnight futures were trading down small until the “strong” Spain debt auction results hit (~5amET) and helped rally prices into the green.  While the demand was concentrated (i.e. there weren’t many bidders) and yields rose, the bid/cover was OK despite all the recent negativity (spec of the country seeking EU/IMF assistance) and government sources told Reuters today that the country won’t have to sell more debt to meet Jul redemptions.  Related to Spain/European sovereign sentiment, the EU/IMF/ECB issued a joint statement discussing how Greece is making positive progress on its fiscal consolidation efforts.  The headlines around European bank stress tests in the last 2 days has helped risk sentiment, w/investors thinking the published results (due mid-Jul according to EU officials) will have the same positive impact as the US tests of last year (it also helped that Spain and France both said its banks are testing well).  On the economics front, the US numbers have been sluggish in the last 48 hrs, starting w/housing starts Wed and this morning’s jobless claims/Phili Fed.  The US housing picture has def. darkened some since Apr, when the tax credit expired (we saw this w/the NAHB survey out earlier this week, the starts Wed morning, and TOL’s update last night), although its not clear if this is just a temporary hangover or the start of a more permanent retrenchment (for the moment, investors are thinking more the former).  The corporate news this week has been negative, but the data points aren’t conclusive enough to condemn the entire upcoming earnings season and investors are increasingly looking forward to the week of Jul 12, when AA kicks off the Q2 reporting period (today, STLD’s neg. earnings update is hitting the steels while TOL is weighing on the builders; however, KR and SJM are climbing; FDX and BBY from earlier in the wk were disappointments).  The US financial regulatory reform process continues to move forward, although the most contentious issues aren’t expected to be tackled until next week (Lincoln + Volcker); it seems though that support for the Durbin amendment continues to wane (something that is helping V, MA).  On the BP front, the stock has stabilized following yesterday’s round of announcements (divi, escrow, etc), although a lot of the strength has been short covering and a lot of uncertainty remains (i.e. larger long-onlys are still not doing much).