Chaos Ends With Bulls Ahead
08/01/07 - 05:14 PM EDT
Robert Holmes
The 10-year note was down 3/32 in price, yielding 4.75%, and the 30-year bond lost 4/32, yielding 4.90%.
Ian Shepherdson, chief economist with High Frequency Economics, said that the decline in the ISM data signals the end of the surge in auto production. "As the auto boost fades from the survey we expect the headline index to slip back to 50 or so," Shepherdson said. "After that, much will depend on whether the current gyrations in the market morph into a sustained credit crunch. For now, this report should at least sow some doubt among growth bulls." More clues about the health of the automotive sector came from July auto sales data. General Motors (GM Quote - Cramer on GM - Stock Picks) said auto sales fell nearly 19% last month, yet the Dow component climbed 1% to close at $32.73. Ford (F Quote - Cramer on F - Stock Picks) reported a 19.1% drop in last month's sales, and DaimlerChrysler (DCX Quote - Cramer on DCX - Stock Picks) posted a 9.1% decline in sales. Elsewhere on the economic docket, the National Association of Realtors said that pending home sales rose an unexpected 5%, the biggest increase in three years. Metals prices finished with losses. Gold was off $3.40 to end at $675.90 an ounce, and silver was lower by 6 cents at $12.95 an ounce.
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