Dedham Condominiums

Traders aggressively sold U.S. Treasury securities on Tuesday for a second straight session, as they continue to show disappointment over the Fed statement. Traders were hoping that the Federal Open Market Committee, at its meeting last Thursday, would hint that its tightening cycle was nearing the end. But instead, the Fed reiterated its intention to remove accommodation at a 'pace that is likely to be measured.' The continuation of rate hikes paired with strong corporate and economic news, plus apprehension over Friday's June employment report, have sent Treasury prices plunging and yields, which move in the opposite direction of prices, climbing. The yield on the benchmark 10-year note closed at its highest level since June 15. Mortgage rates have held near the low levels of last week. This, however, is unlikely to continue.

A strong report on Factory Orders in May rose 2.9 percent - the biggest gain in 14 months and far stronger than the 0.7-percent gain in April - put some pressure on Treasuries and buoyed stocks. Like durable goods orders in May, aircraft made up the lion's share of factory orders. Excluding transportation, factory orders fell 0.3 percent.

Positive Corporate Reports Spur Wall Street

Stocks posted their second straight winning session, thanks not only to upbeat factory orders but also due to positive corporate news. Techs led the advance, with chips, software and Internet stocks setting the pace. Amazon.com rose on the heels of an upgrade, and Apple climbed after a brokerage jacked up its third-quarter earnings forecast. Wal-Mart also advanced when it increased its June sales forecast to 4.5 percent - up from the previous 2 percent to 4 percent range. Wal-Mart led the Dow Jones Industrials with a 3.15-percent increase, but Exxon, which appears to move in concert with oil prices, followed it closely. Oil briefly topped $60 a barrel, but closed at $59.59, while Exxon added 3.14 percent. Six additional components gained more than 1 percent, led by Intel, AIG and Home Depot. The seven Dow stocks that closed in negative territory showed modest losses.

Intel also was the biggest gainer of the tech bellwethers with a1.8-percent increase. Also above the 1-percent line were Dell and Microsoft, which added 1.3 percent and 1.1 percent, respectively. Of the four tech big caps that closed negative, only Cisco Systems suffered a substantial loss - down 0.97 percent.

At closing: The Dow 30 Industrial Index was up 68.36 points or 0.66 percent at 10,371. 80; the Nasdaq Composite index was up 21.38 points or 1.04 percent at 2,078.75, and the benchmark Standard & Poor's 500 Index was up 10.55 points or 0.88 percent at 1,204.99.

The 30-year Treasury bond was down 1-7/32 in price with the yield rising to 4.36 percent versus a 4.30-percent closing on Friday.

The 10-year Treasury note was down 14/32 in price with the yield rising to 4.10 percent versus a 4.04-percent closing on Friday.

The 5-year Treasury note was down 9/32 in price with the yield rising to 3.89 percent, versus a 3.82-percent closing on Friday.

AVERAGE mortgage rates (zero discount points) based on rates collected nationwide were:

The 30-year Conventional Fixed-Rate Mortgage was at 5.421 percent from 5.37 percent at Friday's close.

The 15-year Conventional Fixed-Rate Mortgage was at 5.01 percent from 4.975 percent at Friday's close.

Coming Up

On Wednesday the ISM report on non-manufacturing conditions for June will be released. This report monitors the service sector, which employs far more individuals than manufacturing, but is far less influential. Analysts are estimating the index will come in at 59.0, which is up only a tad from the 58.5 reading in May. There also will be two surveys of nationwide retail sales for the week ended July 1, but these generally have little impact. Market watchers will be looking ahead to Thursday's first-time unemployment claims for the week ended July 1 and Friday's all-important employment report for June. Overnight and into tomorrow it is more than likely that mortgage rates will continue to edge up due to the huge increase in the yield of the 10-year note, which lenders use as a guide to set rates. The yield on the benchmark note closed at 3.92 percent on June 30 (last Thursday) and at 4.10 percent today.

Carolyn Siegel

carolyn@interest.com

Source: Interest.com All rights reserved. Copyright Interest.com