Data was mixed, with the Challenger job cut report confirming a 41% drop in announced cuts to 92,900, while the Services ISM report eased to 54.7 from 57.4. Though the data was mixed, stocks gained 2-2.5% thanks to confidence in their self-fulfilling "January effect," plus a little inspiration from the Bush plan apparently doubling from $300 billion.
Topping the list of corporate issuance that weighed on the belly initially were Goldman Sachs ($1.5 billion 5-yr), Bank One ($750 billion 5-yr), ADB ($1 billion 3-yr), though there may have been a little relief after Goldman Sachs priced.
The March bond closed down 8/32 at 110-01, actually quite a feat from 109-14 session lows, given stocks' relentless rise. Despite its sag in the middle, the wings of the curve closed unchanged, with the 2s-30s spread finishing at +317 basis points.
Fedspeak remained pretty balanced, with Atlanta Fed's Guynn only taking issue with Broaddus" ISM optimism. The dollar recovered from overnight weakness with stocks and oil tumbled a $1.