Higher yields bring out the buyers. The 4.72 percent yield on the 30-year auction was a bit below some expectations (I heard estimates of around 4.8 percent) but still much higher than comparable yields of only a few weeks ago. Buying interest was strong.
Stocks rallied immediately, but have since come off their highs. Regardless if we close at these levels (953 on the S&P 500, 1875 on the NASDAQ, and 530 on the Russell 2000) we will be at new highs for all the major indices except the Dow.
The dollar, which was weak all morning, dropped after the bond auction came out and is now again in the downward trend that was so evident in April and May.
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