You wouldn't know it just by looking at the results for major stock proxies, but Wednesday was a big day on Wall Street. Big, in the sense of the Treasury market's rally and big as it pertains to the amount of angst among equity traders as to the sustainability of the recent advance. Alternatively, there was a lot of pain among short-sellers because of more big gains for some small-cap names.

The biggest action was in the Treasury market, where the price of the benchmark 10-year note rose 28/32 to 100 29/32, its yield falling to 3.52%, its lowest level since 1958. The price of the 30-year bond rose 1 28/32 to 113 21/32, its yield falling to 4.51%.

Elsewhere, the dollar recovered from its recent weakness, especially vs. the euro, while crude futures rose 2.4% to $29.19 per barrel and gold futures gained 0.6% to $352 per ounce.

The latest rally in long-dated Treasuries was sparked, in part, by reports in The Washington Post that Treasury Undersecretary Peter Fisher has withdrawn his name for consideration as president of the New York Fed.

"It is believed that as long as Pete 'The fixer' Fisher remains in his current position at the Treasury, the 30-year will not be reinstated," commented Bianco Research. "It was Pete's decision to eliminate the 30-year bond on Halloween day 2001 and his reputation and credibility are tied to it. Recently he said rumors of the return of the 30-year 'aren't worth spit'."

Treasuries were also buoyed by a weaker-than-expected April retail sales report. Rather than rise 0.4%, as expected, retail sales fell 0.1% last month. Excluding autos, retail sales fell 0.9% vs. expectations for a rise of 0.2%.

"Someone forgot to tell the U.S. consumer that the war is over," quipped David Rosenberg, chief North American economist at Merrill Lynch. The data suggest his below-consensus forecast of 1.8% second-quarter GDP growth has "considerable downside risk," he said.

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