Thursday's bond market has opened in positive territory following weaker than expected economic news and another round of stock losses. The stock markets seem to be worried about the potential approval of the Fed bailout program that the Senate approved last night. The result is the Dow down 220 points and the Nasdaq losing 53 points. The bond market is currently up 24/32, which will likely improve this morning's mortgage rates.

The Commerce Department gave us August's Factory Orders data late this morning, saying that new orders for durable and non-durable goods fell 4.0%. This was a much larger decline than was expected and indicates that the manufacturing sector is still slowing. That is good news for the bond market and mortgage rates.

Also released this morning were last week's unemployment claim figures. The Labor Department said that new claims rose to 497,000 last week, reaching a seven year high. This is also good news because it raises concerns about what tomorrow's monthly Employment report will show.

The Labor Department will post September's Employment report early tomorrow morning. This report will reveal the U.S. Unemployment rate, number of new payrolls added and average hourly earnings. These are considered to be very important readings of the employment sector and can have a huge impact on the financial markets. The ideal scenario for the bond market is rising unemployment, falling payrolls and a drop in earnings.

Weaker than expected readings should help boost bond prices and lower mortgage rates tomorrow. However, stronger then forecasted readings would not be good news for mortgage pricing. Analysts are expecting to see the unemployment rate 6.1%, a decline in new payrolls of approximately 105,000 and a 0.3% increase in earnings.

                   Mel