Short covering in the Financial sector following speeches by Fed chairman Bernanke and JP Morgan CEO Dimon led the market to a rally yesterday. So far today, the banks are continuing to rally in Europe, but higher oil prices are leaving traders unsure, so the equity futures are flat.

Share prices had been in negative territory yesterday until some mid-day speeches and TV appearances by key financial people led to a mini-rally in New York. By the close, the DJIA gained +152.3 +1.36% to 11384.2, the S&P 500 gained +21.4 +1.71% to 1273.7, and the NASDAQ Composite gained +51.1 +2.28% to 2294.4. The Toronto Composite gained +0.71%, but the Toronto Venture lost -78.7 -3.17% to 2399.7.

In NY, the Financials (XLF +6.5%) followed by Health (XLV) and Consumer Discretionary (XLY), both up +2.6%, were the winners. The loser again was Energy (XLE -1.7%) as Crude Oil ($WTIC) dropped -$5.33/barrel to 136.04. $GOLD futures dropped -$5.50/oz to 923.30.

The leading industry groups were Airlines ($XAL +11.2%), Banks ($BKS +7.6%), Broker-Dealers ($XBD +5.4%), and REIT’s ($DJR +6.8%). Goldminers ($XAU -1.7%) and Oil services ($OSX -1.5%) were the losers.

For the extreme Cara 100 stocks, the winners were ERJ (+11.0%) and BC (+8.2%). The losers were NUE (-4.4%), TCK (-4.3%) and TS (-4.2%). The 30-year US Bond ($USB) gained +0.47% to 116.84. The yields on the 30-year, 10-year, and 5-year Treasury issues were down a bit and the T-Bill yield gained as traders moved out of short-term debt issues to take on a bit more risk. The US Dollar index ($USD) gained +0.37% to close at 73.00. The Euro lost -0.40% to 1.5666, Yen -0.36% to 93.01, Pound -0.36% to 1.9694, and the Cdn Loonie -0.19% to 0.9807.

Earlier today, the Asia-Pacific equity markets all rallied. The Australia All-Ords gained +1.33% to 5089.4; the Shanghai Composite gained +3.75% to 2920.55; the Hang Seng of HK gained +2.76% to 21805.8; the Indian Sensex 30 gained +4.60% to 13964.3; and the Nikkei 225 was up just +0.15% to 13052.1.

European stocks this morning at about 8:05am ET. were stronger. The FTSE 100 is up +1.23% to 5507; the French CAC up +1.39% to 4336; and the German DAX +1.18% to 6379.

Crude Oil futures are up +1.91/bbl to 137.95, which is making equity traders nervous.