ECONOMIC NEWS:
NEW YORK (CNNMoney.com) -- The yield on the 10-year Treasury note fell below 4 percent for the first time in two years early Wednesday. At 9:13 a.m. ET, the yield stood at 4.02 percent, down from 4.06 percent late Tuesday but up from a rate just below 4 percent earlier in the day.
A gloomy U.S. economic outlook and speculation that the Federal Reserve could cut interest rates have worried investors and lifted bond prices - which move inversely to prices. Government bonds rose beginning late Tuesday after the Federal Reserve released a new economic outlook that predicted a slowing economy in the next year. This raised hopes that the Fed will cut rates again when it meets in December.
Worries of a battered financial sector have also put a strain on markets as a string of mortgage lenders took hits from write-downs on mortgage-backed securities. The government-sponsored enterprises Freddie Mac, and Fannie Mae recently reported weak quarterly results on losses from mortgage defaults. Several other large financial services companies - including Citigroup, Merril Lynch, WAMU and Bank of America - have also reported write-downs due to the subprime mortgage crisis.
Wednesday morning, stock futures were lower, sending investors flocking to the safe-haven of bonds, suggesting a tough start for Wall Street ahead of the Thanksgiving holiday.
In currency trading, the dollar fell to a new low against the euro and also fell to a two year low against the yen. Currencies have been climbing steadily against the dollar since August amid fears for the health of the economy.
Surging oil prices have also driven up debt prices. Crude rose to a new intraday record within 71 cents of the $100-a-barrel mark. Light sweet crude for January delivery rose as high as $99.29 a barrel in electronic trading after the New York Mercantile Exchange closed, breaking the previous intra-day record of $98.62 on Nov. 7.
Thank you,
Jeff Sargent
Jeff Sargent
President – Residential Mortgage Division
ONB Bank & Trust Co
8908 S Yale Ave, Suite 250
Tulsa, OK 74137
Office: 918.392.6572
Cell: 918.636.0630
Fax: 918.392.6550
jeff_sargent@onbbank.com
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