Daily Market Update 6/3/09

Mortgage rates held steady Wednesday. In economic news, Factory Orders rose 0.7% last month, exceeding forecast and reversing a 0.9% decline in April. The Institute for Supply Management services index contracted at a slower pace in May, but fell short of expectations. Federal Reserve Chairman Ben Bernanke testified on Capitol Hill this morning, saying, "In recent weeks, yields of longer-term Treasury securities and fixed-rate mortgages have risen. These increases appear to reflect concerns about large federal deficits but also other causes, including greater optimism about the economic outlook, a reversal of flight-to-quality flows and technical factors related to the hedging of mortgage holdings." On the matter of budget deficits, Bernanke said, "Maintaining the confidence of the financial markets requires that we, as a nation, begin planning now for the restoration of fiscal balance." The Congressional Budget Office projects the deficit to reach $1.85 trillion this year, four times the previous high. Stocks moved lower. No other economic data will be released today.