Market Analysis

As most probably know by now, yesterday was a highly unusual trading day, with an erroneus trade triggering automatic computer generated selling which triggered human panic.  At one point the Dow lost nearly 1,000 points. It finished down 348 points.  Today selling pressure continues for stocks with the Dow down another 160 points in morning trading.  While mortgages have benefitted somewhat, the real beneficiary of the "fear" trade has been US Treasuries.  The spread between the 10 Yr Treasury and mortgage rates has widened as those fleeing the market are "parking" their money in what is viewed as the safest asset class which are the Treasury notes.

In economic news, April's Non Farm Payroll report showed an increase of 290,000 vs expectations for an increase of 187,000.  In addition, whereas analysts had been projecting the bulk of the increase to be from temporary Census workers, only approx 66,000 of the increase was  from Census.  Additionally, Feb and March revisions to the report increased job growth by 121,000 in those 2 months.  In a separate report which utilizes a different suvey though the nation's jobless rate inched up to 9.9% from 9.7%.