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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Sharon who wrote (33713)	3/16/2001 8:56:33 AM
From: Venkie	Respond to of 65232

send me a piece of apple pie plz mam.

To: Sharon who wrote (33713)	3/16/2001 9:41:27 AM
From: stockman_scott	Respond to of 65232

Treasuries Gain, Market Looks to the Fed Friday March 16, 9:33 am Eastern Time By Daniel Sternoff <<NEW YORK (Reuters) - U.S. Treasuries extended a week of strong gains on Friday as traders bet eroding consumer confidence will press the Federal Reserve to slash interest rates deeply next week to shore up the economy. Global equity market turmoil, a darkening economic outlook in Japan and fears a slowing U.S. economy will hurt the rest of the world also drove investors into the safety of low-risk U.S. government debt and the dollar. ``We have a lot of fear factors,'' said David Horner, senior financial strategist at Merrill Lynch Government Securities. Reports showing wholesale inflation pressures were subdued in February while factory output tumbled in January reinforced views that the Fed can take comfort from tame price pressures while turning its rate guns on averting a recession. ``Clearly we are in a flight to quality now as well as in an expectation that the economy is performing in a way that will make the Fed more aggressive,'' Horner said. Short-term Treasury yields, a market gauge of expected Fed policy, tumbled to 29-month lows as players raised the odds that the Fed's rate-setting committee, which meets on Tuesday, will slash interest rates more aggressively than previously thought. Dealers were squarely focused on a 10:00 a.m. (1500 GMT) report on consumer confidence which could provide the Fed with a trigger for a deep rate cut. ``A weak confidence number will raise the odds of the Fed going 75 basis points,'' said Michael Pianin, a governments trader at Fuji Securities International. The University of Michigan's sentiment index is expected to show consumers continue to be more apprehensive about the economic outlook, raising fears that curbs on spending may follow. At the start of the week, most Wall Street analysts expected the Fed would cut its 5.50 percent federal funds rate by half a point for the third time this year. But more earnings warnings by U.S. firms, a rise in jobless claims and crumbling stock markets have driven short-term two-year note yields around 0.30 percentage point lower this week -- a sign the market is looking for even deeper Fed cuts. In morning trade, two-year Treasury notes (US2YT-RR) were up 2/32 at 100-25/32, yielding 4.21 percent. Five-year notes (US5YT-RR) rose 8/32 to 105-14/32 to yield 4.44 percent. Benchmark 10-year notes (US10YT-RR) rose 16/32 to 102-3/32, yielding 4.73 percent. Thirty-year bonds (US30YT-RR) gained 12/32 to 101-27/32, yielding 5.25 percent. The Labor Department reported its producer price index gained 0.1 percent after a shock 1.1 percent jump in January. Core producer prices, which strip out volatile food and energy components, fell 0.3 percent, their steepest fall since mid-1993. The Federal Reserve said production by the nation's mines, factories and utilities skidded lower for a fifth straight month in February as businesses ran at their slowest rate in nearly a decade. Total industrial output dropped 0.6 percent in February after a matching 0.6 percent decline in January. As a result, industry operated at only 79.4 percent of maximum capacity, the slowest since a matching 79.4 percent in February 1992. The Commerce Department said U.S. housing starts fell a modest 0.4 percent in February, but stayed at a relatively strong pace of 1.647 million units at a seasonally-adjusted annual rate.>>