Weak Existing Home Sales and AT&T Buys T-Mobile

MARKET WRAP: The announcement from the Treasury that it will begin selling $10B in Mortgage Backed Securities each month starting this month sent MBS prices lower today. The total amount the Treasury owns is $142B. The news sent MBS and Treasuries considerably lower but they did manage to pare some of those losses by the close of trading. The 4% coupon fell 34bp to end the session at 98.97, despite a weak read on Existing Home sales. A big M&A deal and a somewhat stabilization of Japan’s nuclear reactor problems helped to boost Stock prices today and as money came out of the Bond markets. AT&T announced it will purchase T-Mobile in a deal worth $39B. The Dow surged 178.01 to 12,036.53, the Nasdaq rose 48.42 to 2,692.09 while the S&P 500 gained 19.18 to 1,298. Oil prices rose as the US and western allies launched an air attack on Libya in an effort to oust Gadhafi settling at $102.33/barrel up $1.26. There are no major economic reports due for release tomorrow.

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