Daily Market Update 1/6/09

Mortgage rates moved lower Tuesday as the yield spread between mortgage-backed securities and Treasurys narrowed for the second consecutive day. Mortgage rates have been unusually high relative to Treasury rates for several months, but the purchase of mortgage-backed securities by the Fed from Fannie Mae and Freddie Mac which began yesterday seems to be having a positive impact. In economic news, Pending Home Sales and Factory Orders for November fell more than forecast, while the Institute for Supply Management Services Index rose unexpectedly. The minutes from last month’s Federal Open Market Committee meeting will be released today at 2:00 PM et. Stocks were little changed, the dollar higher.

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