Stocks Yin to Bonds' Yang

Meanwhile, the typically hawkish Moskow also said "it is much too early to say that inflation is no longer a concern," even as he admitted recent data have been "on the soft side."

In any event, the stock market has not rid itself of a rosier take. The complacency that kept the markets from a correction for so many months is largely still in place, says Barry Hyman, equity market strategist at EKN Financial. "All anyone I talk to wants to know is what to buy, not what to get out of."

On Wednesday, investors were bottom-fishing in some of the hardest-hit parts of the market. Subprime lender Fremont General (FMT Quote) jumped nearly 26% on reports it is in talks with five or six buyers interested in its mortgage business. Some of the homebuilders also were in the green Wednesday, including Toll Brothers(TOL Quote), Lennar(LEN Quote) and Hovnanian(HOV Quote). But news reports of D.R. Horton's(DHI Quote) chief executive Donald Tomnitz saying the rest of the year will "suck," put a damper on the sector's strength. Its shares slid a fraction on the day.

Oil prices were higher Thursday on news of shrinking inventories. Crude gained 1.85% on the day to $61.81 per barrel. Energy stocks followed suit. Exxon Mobil(XOM Quote), Chevron(CVX Quote) and Valero (VLO Quote) were among the sector's winners.

In the bond market, traders noted the new and improved ADP National Employment Report, which showed 57,000 private sector jobs added in the month of February. The report has been spotty in foreshadowing the Bureau of Labor Statistics' nonfarm payrolls report, but the new methodology may help put it within better striking distance of Friday's release.