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Treasuries extend gains for seventh straight session

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The major indexes have sunk to their lows of the session as another late round of buying in the Treasury bond market had the 10-year Treasury bond recording a gain for the seventh straight session, as the March futures contract (ty03h) $117'035 +0.17% traded yet another contract high and had the benchmark bond's YIELD ($TNX.X) 3.645% falling to its lowest close since October 10.

While Treasuries had seen some selling into the 01:00 hour, and looked to have stocks firming from their lows, the late reversal back toward buying in bonds had stocks quickly back near their session lows, then breaking lower.

The Dow Industrials (INDU) 7,725 -1.43% has extended its losses to a 112-point decline, while the broader S&P 500 Index (SPX.X) 823.93 -1.3% suffers similar fate as the Dow, with a 10-point drubbing. The NASDAQ-100 Index (NDX.X) 984 -0.67% has shown relative strength during today's declines, but continues to be pulled lower by the other major averages.

Earlier weakness in the Dow Jones Home Construction Index (DJUSBH) 298.75 -6.17% continues to build to the downside, despite the lower YEILDS found from the longer-dated 10-year and 30-year Treasuries, which would have mortgage rates declining further.

Volume levels have been very light today, with NYSE at just over 905 million shares with 45-minutes left to go in today's trade. While slightly above NYSE levels, NASDAQ volume is anemic at just over 950 million shares traded.

After having some marginal improvement in the new highs versus new lows category in the past couple of session, this indicator of breadth begins to show further leadership to the downside with the NYSE showing 97 stocks hitting new 52-week lows, compared to 59 stocks trading a new 52-week high. NASDAQ reports 64 stocks trading a new 52-week low compared to 55 stocks having traded a new 52-week high in today's session.

Wholesale retailer BJ's Wholesale Club (NYSE:BJ) $10.28 -24.41 holds today's biggest loser after gapping lower at $10.34 at the opening of today's trade, and is one of the stocks listed at the NYSE that is hitting a new 52-week low. Earlier today, the company reported Q4 (January) earnings of $0.71 per share, which beat estimates by a penny, but warned that full year 2004 ESP of $1.25-$1.35 would come in well below consensus estimates of $1.72. While not leading today's sector loser's, the S&P Retail Index (RLX.X) 247 -2.27% trades down in sympathy, while Dow component and discount retailing giant Wal-Mart (NYSE:WMT) 47.14 -1.36% slips back below its shorter-term 21-day SMA, which had been trying to round higher.

Jeff Bailey

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