Market Update 5/05/2008

By
Mortgage and Lending with CYPRESS MORTGAGE

Treasuries rose, with two-year yields falling from the highest level since January, as a

decline in European stocks boosted demand for the safest of assets. The bonds also

gained after former Federal Reserve Chairman Alan Greenspan said the U.S. has

slipped into an ``awfully pale recession'' and may continue to languish for the rest of

the year. U.S. service industries probably contracted for a fourth month in April,

economists surveyed by Bloomberg News said before a report today. The price of the

2 1/8 percent security due in April 2010 was 99 13/32. Ten-year yields fell 1 basis point

to 3.85 percent. The former Fed chairman, who who now consults for clients including

Deutsche Bank AG, said the U.S. economy is ``clearly receding,'' with growth now at

about zero percent. A report today will probably show service industries in the U.S.

contracted for a fourth month. The Institute for Supply Management's nonmanufacturing

index, which makes up almost 90 percent of the economy, dropped to

49.1 in April from March's 49.6, according to the median estimate in a Bloomberg

survey of economists. The market is .125 to .375 better in discount this morning.

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