Malden Condominiums

Prices of U.S. Treasury securities slipped slightly lower on Friday and yields, which move opposite of prices, edged barely upward after a week that saw rates rise across the board. The firming in Treasury yields meant that rates on many mortgage products followed suit.

The market waffled back and forth on Friday as it digested the October U.S. employment report. Although nonfarm payrolls rose a smaller-than-expected 56,000, versus forecasts for a 100,000-job gain, hourly wages popped up by 0.5 percent, more than double expectations.

Ultimately, traders decided one month's worth of data was unlikely to sway the Federal Reserve from its program of gradual rate rises in place since June 2004. Many pundits still foresee another 25-basis-point rate increase in December. And with a new Fed chairman taking the helm in January, they figure the central bank wants to maintain the status quo and not jolt the markets with any dramatic shift in policy stance.

A strong dollar, which continued its recent advance and hit its highest level in roughly two years against the Japanese yen, coupled with more weakness in crude oil prices, helped underpin Treasury prices on Friday.

Stocks End Strong Week Firmer

Most key U.S. stock indexes wavered on both sides of even on Friday, mustering a late-day advance to the plus side to end a strong week on a firmer note.

The S&P 500, Nasdaq 100 and Dow Jones 30 index all scored substantial percentage gains for the week.

The decline in crude oil prices Friday weigh down many energy companies, including Exxon Mobil, which fell $0.67 to $57.90.

Carmaker General Motors gained $0.16 to $26.77 after saying it was offering extra cash rebates on most 2005 models sold on the U.S. market.

Apple Computer fell $0.70 to $61.15 after a brokerage downgraded it to "neutral" from "overweight."

And Oracle gained $0.41 - more than three percent - to $12.61 after news that its chief financial officer would exit the firm after only five months.

At 4:00 p.m. EST:

The Dow 30 Industrial Index rose 8.17 points (+0.08 percent) to 10,530.76; the Nasdaq Composite index gained 9.21 points or 0.43 percent to 2,169.43, and the Standard & Poor's 500 Index added 0.20 point or 0.02 percent to end at 1,220.14.

The 30-year Treasury bond was down 6/32 in price with the yield rising to 4.85 percent from 4.83 percent on Thursday.

The 10-year Treasury note was off 3/32 in price with the yield firming to 4.66 percent from 4.64 percent on Thursday.

The 5-year Treasury note was down 3/32 in price with the yield rising to 4.56 percent from 4.54 percent on Thursday.

At 4:00 p.m. EST, AVERAGE mortgage rates (zero discount points) based on rates collected nationwide were:

The 30-year Conventional Fixed-Rate Mortgage was at 6.105 percent versus 6.087 percent on Thursday.

The 15-year Conventional Fixed-Rate Mortgage was at 5.666 percent from 5.639 percent on Thursday.

Coming Up:

After this week's Fed rate rise and U.S. jobs data, next week's holiday-shortened schedule features a fairly scanty slate of figures for traders to mull. On Monday, September's consumer credit report is expected to show a rise to $6.0 billion. And on Thursday, the September U.S. trade balance is forecast showing a trade gap that swelled to $61.0 billion.

On the heels of this week's strong rate increases, mortgage lenders might take a breather over the weekend and leave rates on key products stable at recently elevated levels.

Laura Jacobs

ljacobs@interest.com

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