Dollar, Crude Oil Continue to Push to New Records

U.S. 10-year Treasury bond prices fell today, despite what many consider an
overall negative economic environment for the U.S. Bonds typically rise on
economic weakness and fall on strength, trading inversely to the dollar. Today,
however, bond prices actually fell on negative news and negative market
conditions. Bonds are trading near yearly highs, after rallying earlier in the
week. Some traders contributed falling bond prices to rising expectations of a
Fed cut next week.

The euro rose versus the dollar and the yen today, hitting new highs versus
the U.S. currency. Today, traders bet that the Fed would cut rates again in the
U.S., which would weaken the dollar even further than it already is. The euro
surged on general negative U.S. sentiment, combined with rising oil and gold
prices. The euro was basically flat on the yen, as most of the action concerned
euro strength and dollar weakness. The dollar fell versus the Canadian dollar,
but was flat on the British pound.

Crude oil futures hit new record highs today above $92 a barrel, on continued
fears that Turkey will invade Iraq and possibly cause a disruption to global oil
supplies. Middle East tensions have risen considerably this week, with the US
passing sanctions against Iran and the Iraq/Turkey situation moving closer to a
full-blown conflict. Natural gas futures also spiked, jumping more than 7%.

Gold futures also shot to new 28-year highs, on pressure from a falling
dollar and rising oil prices. Gold futures normally trade inversely to the
dollar and with crude oil, which is what happened today. Traders bought gold in
favor of dollar weakness and in the face of rising oil prices. Copper futures
rose about 1.7%.

Grains were mixed today. Soybeans fell fractionally, while corn rose about

Earnings from a number of major U.S. corporations, and expectations for a
rate cut next week, led to a broad-based rally in the stock markets today. Major
mortgage lender and damage focus point Countrywide Financial guided higher than
analysts expected, helping to assuage lending and credit worries. Click

to read the rest of today’s

Stock Market Recap

Economic News

Durable goods orders rose 1% last month.

New home sales also increased more than expected in September.