Market Analysis

Bond markets opened up this morning on stock market weakness.  The SEC  charged Goldman Sachs with fraud over how it marketed investments in subprime mortgages.  This news sent financials downward despite better than expected earnings reports from GE and Bank of America.

Bonds improved further in mid morning trading as selling pressure for equities increased.  However, mortgage-backed securites have lost some of their mid morning gains. 

In economic news, March Housing starts came in at a 1.6% increase vs expectations for a 5.7% increase.  However due to February's starts being revised from -5.9% to a gain of 1.1% the March annualized Housing Start pace of 626,000 beat the market's expectation of a 610,000 annualized pace.  March Building Permits were up to a 685,000 annualized pace vs expectations for 625,000. 

Equity investors seem to be paying more attention to a weaker than expected University of Michigan Initial April Consumer Sentiment index which came in at 69.5 vs expectations for a 75.0 reading and down from a reading of 73.6 in March.