Wow... what a wild swing in the stock market this afternoon. Lower earnings guidance from Wal-Mart and Intel along with poor economic news triggered early selling in stocks with the Dow dropping below 8,000 to an intra-day low of 7,969 for a test of technical support. The Dow then underwent a dramatic 900 point reversal when bargain hunters showed up to buy stocks at support to help spark a massive short-covering rally. Large investors didn't want to be 'short' ahead of this coming weekend's G20 meeting in Washington, D.C. The bond market was unable to take much advantage of the early weakness in stocks and then sold off when stocks made their volatile upside 'U-turn.' Our benchmark FNMA 6.0% mortgage bond ended the day 44bp lower to close at $101.00. The day's economic news was weak but no one really expected anything different. Weekly Initial Jobless Claims jumped by 32,000 to reach 516,000 claims, their highest level in seven years and greater than the consensus forecast of 479,000. The 4-week moving average increased by 32,000 to 491,000 claims while Continuing Claims reached 3.89 million, their highest level in 25 years. The claims data provided further evidence of serious problems within the labor market. The Balance of Trade showed a shrinking deficit of -$56.5 billion in September as the global economic recession took hold. Economists were expecting a trade deficit of -$56.8 billion. Imports fell by a record $12.5 billion due to plunging crude oil prices while Exports plunged by a record $9.9 billion. According to RealtyTrac, troubles in the housing sector are showing no signs of letting up as their latest survey indicated about 280,000 homeowners received foreclosure notices during October. This represents a 5% increase over September's foreclosure rate and a 25% increase on a year over year basis. The three-month dollar LIBOR rate took a slight turn for the worse today by rising to 2.15% from yesterday's rate of 2.13%. The rise snaps a 23 consecutive day string of falling dollar-based LIBOR rates and indicated banks would rather hang onto their cash rather than lend it to one another. A $10 billion auction in re-opened 30-year bonds took place this afternoon at 1:00 p.m. ET with mediocre results. The added supply in the long bond may have been a contributing factor to this afternoon's weakness in mortgage bond prices. The Dow ended up 552 points (+6.67%) to close at 8,835. The broader S&P 500 Index jumped 59 points to end at 911 while the NASDAQ Composite Index soared 97 points to finish at 1,596.