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Stocks firm after Treasuries reverse gains

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A slight reversal to earlier bullishness in Treasuries found yields across the major maturities finishing modestly higher with the benchmark 10-year YIELD ($TNX.X) finishing its trading session with 4.233%.

The reversal in bonds that trended from buying in the early morning to selling by late afternoon looks to have caught some equity trader's attention as the Dow Industrials pared a -120 point decline to now trade down just 64 points at 8,798.

The same looks to be true with the broader S&P 500 Index (SPX.X) as it continues to inch higher from its session low of 919 to now trade down 8.7 points, or -0.94% at 925.76.

Sector action remains broadly negative with the exception of the Gold/Silver Index (XAU.X) 66.54 +4.78%, which has built gains from the opening bell. Also bucking today's broader market weakness are those sectors that have generally experienced declines with the recent month's broader market rally as the HMO Index (HMO.X) 490 +1.6%, Utility Index (UTY.X) 247 +2% and Oil Index (OIX.X) +1.19% buck today's broader negativity.

General Motors (NYSE:GM) $38.50 -3.62% spiked to a session low of $37.82 after the number one automaker said its November total U.S. vehicle sales fell -18% year-over-year, which was below the consensus estimates for an -11.3% decline. Unlike Ford (NYSE:F) $10.10 -11.87%, which said it was cutting back production, General Motors (GM) boosted its fourth-quarter production outlook for North America by 5,000.

Merrill Lynch can't seem to make up its mind on Dow component Merck (NYSE:MRK) $58.91 -1.83%. Earlier this morning, Merrill downgraded the drug giant to "sell" from "buy" at approximately 11:30 AM, which found MRK falling to as low as $55.16. Then after Merck reaffirmed its 2002-03 guidance at 12:30 PM, Merrill came back and upgraded the stock to "neutral" from "sell." In a separate note, Morgan Stanley appears to have waited for MRK's guidance and followed that guidance with a "overweight" rating from "equal-weight."

Jeff Bailey

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