Stocks posted slim gains, lost some steam after a worse-than-expected new home sales report and then turned higher again after the Fed chief pledged to keep interest rates low for the foreseeable future. With the outlook for economic growth and inflation unchanged, the dollar came under pressure and fell to a loss of 0.7% against competing currencies. The weaker dollar lifted dollar-traded commodities. Financial and technology shares were on the rise. JPMorgan led the list of analysts downgrading forecasts on the company. Monthly new home sales numbers disappointed. Retailers also had a strong session. The sector outperformed for the second straight session with a 2.0% gain. Market breadth was positive.

FEAR METER: The market volatility slid on renewed optimism.
STOCKS ON THE MOVE: Printing services firm R.R. Donnelley (RRD) said it is buying Bowne & Co. (BNE), a printer of corporate regulatory filings, in a deal worth $481 million. BNE rallied 60% in unusually-active New York Stock Exchange trading, while RRD shares gained 1%.
BULLISH INDUSTRIES: Financials, Consumer Discretionary, Tech, Industrials, Energy, Health Care, Consumer Staples;
BEARISH INDUSTRIES: Materials;
IN FOCUS: Durable goods, initial jobless claims, Fed’s Bernanke: ‘Monetary Policy and State of Economy’ reports are due out today.

BNE, JPM, RRD