Market commentary

Tuesday stocks were hammered and bond yields hit new 2011 lows amid fresh concerns about the U.S. economy and the shaky euro zone. New fears are emerging about Italy and Spain, two economies with enough external debt to create much larger problems than those created by Greece, Ireland, and Portugal.

This morning the ADP Employment Report showed a gain of 114,000 private payrolls for July, better than some analysts had expected. However, it is still very weak compared to the target of 200,000 and higher needed to make a dent in the unemployment rate. In addition to the ADP report, the Institute for Supply Management reported its index of non- manufacturing businesses, which covers about 90 percent of the economy, dropped to 52.7 from 53.3 in June. This reflects that service industries expanded in July at the slowest pace since February 2010.

The market reactions to today’s news and data is similar to the past few days; stock markets are weak while U.S. Treasuries continue to experience a flight to safety bid. Mortgage prices are improved by approximately .375%.