At 9:00 this morning the 10 yr note and mortgages are a little better after the strong selling yesterday and breakdown of positive technicals. The 10 at 9:00 +11/32 3.56% -3 BP, mortgage prices +10/32 frm yesterday's close; the DJIA at 9:00 +13. At 9:30 the DJIA opened -13, the 10 yr +16/32 and mortgage prices +15/32. (see below for 10:00 levels).

At 8:30 weekly jobless claims were less than expected, down 47K to 522K, markets were looking for 535K; continuing claims also fell to 6.273 mil from last week's revised 6.915 mil. Still some seasonal adjustment factors that may be distorting the claims data over the past couple of weeks. Distortions may play havoc with claims data for another couple of weeks. General Motors and Chrysler accelerated shutdowns this year heading into bankruptcy, months before the traditional July closings. The bonds dipped initially, but turned quickly and have been working some corrective trade after the big price declines yesterday.

At 10:00 the July Philly Fed business index, expected at -5.0, declined to -7.5; new orders were slightly better at -2.2 frm -4.8, prices pd at -3.5 frm -13.0 and employment at -25.3 frm -21.8. The overall report initial reaction took some of the wind out of stocks and added more improvement to the 10 yr and mortgage markets.