Dedham Condominiums

Yields on U.S. Treasury securities, which move in the opposite direction of prices, continued to edge down on Monday. Weak economic signals out of Europe and Japan and a new high in oil prices are raising concerns about a global economic slowdown. This scenario bodes well for Treasuries, which were bought steadily throughout the session. In addition, there were no economic reports released to keep buyers away. Today's slight decline in yields allowed mortgage lenders to keep their rates unchanged.

Oil closed at more than $60 a barrel on Monday for the first time ever, ending at $60.54. The leap put pressure on stocks, which had been trading in positive territory, as fears about a slowing economy, corporate profitability and consumer spending took their toll. Oil prices affect Treasuries in several ways, but the specter of an economic slowdown due to soaring oil prices has attracted buyers of late.

Oil Once Again Hits Stocks

The Dow Jones Industrials headed into negative territory when oil closed over $60, and only 12 of its components were able to post gains. Exxon led with a 1.98-percent increase and Boeing added 1.9 percent after announcing a stock buyback. Seven of the 18 components to close negative declined more than 1 percent. GM lost 1.8 percent and Disney was down 1.6 percent, but Pfizer, Hewlett-Packard, Alcoa, United Technologies and Honeywell took big hits, also. There are no airlines listed in the Dow 30, but they were under pressure today due to the climb in oil prices.

The Nasdaq composite traded negative much of the session, with weakness in Internet, software and networkers dragging the index down. Four of the tech bellwethers closed in positive territory, but only JDS Uniphase posted a substantial gain - up almost 2 percent. Cisco Systems, Yahoo! and Ericsson each shed more than 1 percent.

At Closing:

The Dow 30 Industrial Index fell 7.06 points or 0.07 percent to end at 10,290.78; the Nasdaq Composite index lost 8.07 points or 0.39 percent to close at 2,045.20, and the benchmark Standard & Poor's 500 Index closed down 0.88 points or 0.07 percent to end at 1,190.69.

The 30-year Treasury bond was up 13/32 in price with the yield falling to 4.19 percent versus a 4.22-percent closing on Friday.

The 10-year Treasury note was up 3/32 in price with the yield falling to 3.90 percent versus a 3.91-percent closing on Friday.

The 5-year Treasury note was up 1/32 in price with the yield falling to 3.68 percent versus a 3.69-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 5.38 percent from 5.383 percent at Friday's close.

The 15-year Conventional Fixed-Rate Mortgage was at 4.953 percent from 4.958 percent at Friday's close.

Coming Up

The Conference Board's Consumer Confidence report for June - the first economic release of the week - will be out Tuesday morning. Analysts are expecting confidence to soar, with many pointing to a reading of 104.2 - a big jump from the 97.7 registered in May. If consumer confidence does climb significantly, it will put pressure on U.S. Treasuries. Bond traders equate confidence and spending, so a strong report would lead to increased retail sales, which would help the economy. If confidence comes in below forecasts, that could spur buying. Meanwhile, mortgage rates should remain near present low levels.

Carolyn Siegel

carolyn@interest.com

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