Mortgage rates inched lower Tuesday, outperforming Treasurys. The Institute for Supply Management services index rose in April to its highest level since October, beating forecast. Fed Chairman Bernanke, in testimony on Capitol Hill, expressed cautious optimism about the economy, saying, “We continue to expect economic activity to bottom out, then to turn up later this year.” He also warned of dangers to the economic recovery if the financial system suffers a relapse. Stocks moved generally lower. The Treasury will auction a total of $71 billion of 3-, 10-, and 30-year notes over the next three days. Supply concerns continue to weigh heavily on the Treasury market.