Daily Market Update 12/31/08

Mortgage rates moved lower Wednesday after having jumped briefly Tuesday. Mortgage-backed securities (MBS) markets are likely to remain highly volatile through the week due to extremely light trading. The MBS market closes today at 2:00 PM et. Late yesterday the Fed announced it will begin purchasing up to $500 billion MBS's from Fannie Mae and Freddie Mac in January, prompting a market rally. In economic news, Jobless Claims fell to 492,000 last week, far below expectations. Stocks and the dollar moved modestly higher.