Closing Bell 10.25.07

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Equities. After a slow start, the stock market worked its way into another day of high volume and volatility. Shares we up and down a bit in the morning and then took a downward tumble midday. The down and the S&P climbed almost back to flat in afternoon trading, with the Nasdaq once again falling behind. By the closing bell, the Dow was down 3.33, or 0.02%, to 13671.92. This was a slightly deeper drop than yesterday’s. The S&P fell 1.48, or 0.1%, to 1514.40. A slightly shallower drop than yesterday. The Nasdaq dropped 23.90, or 0.9%, to 2750.86. Also a shallower drop than yesterday. One billion, six hundred million shares traded hands on the New York Stock Exchange.
Bonds. Treasuries were all over the place today today. Yields on the two year t-bills fell to their lowest point in more than two years, but recovered to end down just 2/32s. The auction on the 5-year note generated relatively more interest than yesterday's 2-year note auction had, but foreign central banks still seem to be avoiding US debt. Five-year Treasury notes were down 4/32 in price for a 4.03 percent yield. The 10-year note was unchanged for most of the day, and moved down 10/32 in after hours trading. The thirty year was down 18/32s.
Fed futures are showing an 86 percent chance of a quarter-percentage point to 4.5 percent at next week's meeting. Yesterday some traders began betting on a 50 basis point cut, and the futures now indicate a 14 percent chance of the deeper cut.
FT Alphaville. Putting the Ha back in Alpha.

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