Treasurys

After Ben Bernanke pulled a trick from the 1960s Fed handbook to twist down long-term interest rates, experts are mixed on how it will affect the U.S. economy. Wall Street reacted negatively to the news. The Dow fell 284 points.

U.S. bond prices fell Wednesday on violence in Libya. An auction of $35 billion in five-year notes met with little demand, while 10-year Treasury prices fell 22 cents per $100 invested. Stocks also declined as a result of the Libyan instability.

U.S. mortgage rates have grown for five straight weeks, in the last week hitting their highest levels in seven months. Ten-year Treasury note yields have been climbing on inflation concerns, driving the higher rates.

The markets ended the week on a high note with encouraging economic news, a surprise jump in consumer sentiment and a drop in the trade deficit, among other things. Is the Fed's latest round of stimulus working?

Stocks closed a bit higher after flitting around breakeven on light trading for much of the day. Financials outperformed, while commodities suffered. Treasury bond yields hit their highest intraday level since June. End-of-year strangeness?

It's no secret that stock investors have suffered through roller-coaster volatility this year for little or no return, while bond investors have been having a ball. The longest-dated Treasury mutual funds have returned nearly 20%. Stocks, meanwhile, have done zilch.

Stocks enjoyed a respite from what some see as a bubble in pessimism, and that sudden turn should be unnerving to a fast-growing crowd of individual investors: those who have recently raced into ultrasafe holdings like U.S. government bonds.

A record plunge in existing-homes sales last month sent equity investors skittering toward safety Tuesday, pushing the Dow to a triple-digit loss. The Dow fell 1.3% to finish at 10,039.

With more big names raising concerns about overheated T-bonds, what's an investor with a Treasury-heavy portfolio to do? Some ideas: Consider corporate bonds or perhaps stick with government debt, but only short-term securities.

The major averages rallied sharply Wednesday with the blue-chip Dow closing up 274 points, fueled by a rosier earnings forecast from money manager State Street Corp. and anticipation of strong monthly retail sales reports on Thursday.