MBS prices are up +13/32 (FNMA 30-yr 5.5 at 100.47), just below the initial pricing level at +14/32. It was a very volatile session, although stock and Treasury markets experienced much larger movements. On a historic day, the House unexpectedly failed to pass the $700 billion rescue plan, and investors embarked on a flight to safety. The Dow lost about 750 points, while Treasuries surged. Oil prices fell $11 per barrel to $96 per barrel. Tomorrow, Chicago PMI and Consumer Confidence will be released.
The lack of a systemic action to help credit markets leaves a lot of questions. Financial institutions may be even more reluctant to make loans. Confidence in the ability of lawmakers to fix the problem is lower. Investors will be waiting to see if lawmakers come up with an alternative rescue plan
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With volatility continuing to soar, the Dow [.DJIA 10372.54 
-770.59 (-6.92%) 
] and S&P [.SPX 1109.03 -103.98 (-8.57%) ] were on track for their biggest point losses. Prior to today, the biggest point drops for the Dow & S&P was after the 9/11 attacks in 2001. All the major indices were down over 6% for the first time since 1998. The VIX [VIX 46.56 
11.82 (+34.02%) ] 9/17/01 down 685
- 4/14/00 down 618
- 10/27/97 down 554
- 8/31/98 down 513
- 10/19/87 down 508
S&P biggest point drops
- 4/14/00 down 83
- 8/31/98 down 70
- 10/27/97 down 65
- 9/15/08 down 59
- 10/19/87 down 57
NASDAQ biggest point drops
- 4/14/00 down 356
- 4/3/00 down 349
- 4/12/00 down 286
- 4/10/00 down 258
- 1/4/00 down 230
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