Stocks, Bonds Feeling Gross

Late Thursday, amid a wicked selloff in Treasuries, legendary bond fund manager Bill Gross of Pimco declared that bonds are now in a bear market. A contrarian might say Gross' bombshell revelation means the Treasury market might just stabilize soon.

If bonds find their range, the mystery is what will stocks do? Only then will it be clear if market participants were just going through an attitude adjustment based on belief in a stronger-than-expected economy, or if investors really believe inflation and rate hikes are necessary.

In the meantime, Gross' words in the late afternoon Thursday helped push the 10-year note down 1 5/32, its yield rising 5.12%, its highest level since July 2006. That, in turn, pushed stocks down sharply, with major averages ending near their lows of the day. ...