Meanwhile, heating oil broke though a new record of $3.6985. Earlier in the day, better-than-expected results in U.S. retail sales excluding automobile sales pushed fixed income lower and equity future higher, but the optimism reversed sharply at the open with the Dow Jones industrial average and S&P/TSX composite declining. However, stocks recovered in the afternoon as commentary from various Fed commentary suggesting that intervention had helped alleviate some of the tensions in financial markets but that the turmoil was ongoing.

U.S. retail sales declined in line with expectations in April, according to a report from the Commerce Department, which saw a 0.2% month-over-month decline in sales following the previous month's unrevised flat report. Excluding automobiles, retail sales rose 0.5% after gaining a revised 0.4% in March, previously reported as a 0.1% rise.

Speaking at the Atlanta Fed's Financial Markets Conference, Federal Reserve Chairman Ben Bernanke addressed the current state of the U.S. economy, calling current financial market conditions "far from normal." Nevertheless, he acknowledged that recent measures from the Fed has had some positive effects, although the fundamental strains took time to address.

Yields on two-year Canadian government bonds are up 7.8 bps to 2.81%, with five-year yields up 5.3 bps to 3.17%, 10-year yields up 4.2 bps to 3.60% and 30-year yields up 1.2 bps to 4.07%.

U.S. two-year yields are up 15.6 bps to 2.46%, with five-year yields up 15.0 bps to 3.16%, 10-year yields up 10.4 bps to 3.90% and 30-year yields up 8.2 bps to 4.62%.

The Eurodollar September 08 contract is down 18.0 ticks to 97.16.

The yield curve is flatter, with the 10/2-year spread down 4.7 bps to 144.21 bps.

The Canadian 10-year note is yielding 30.06 bps less than the U.S. 10-year note.

In Germany, returns on two-year bonds are up 7.8 bps to 3.84%, with five-year yields up 7.9 bps to 3.87%, 10-year yields up 7.3 bps to 4.08% and 30-year yields up 6.8 bps to 4.61%.

Yields on UK two-year bonds are up 17.3 bps to 4.53%, with five-year yields up 12.8 bps to 4.44%, 10-year yields up 10.0 bps to 4.71% and 30-year yields up 4.3 bps to 4.50%.

Toronto's S&P/TSX composite index closed down 49 points to 14617, the Dow Jones industrial average down 44 points to 12832, the S&P 500 down one point to 1403 and the Nasdaq up seven points to 2495.

European stock markets closed in mixed territory with the Eurostoxx flat at 3239, the UK FTSE 100 down nine points to 6212 and the German DAX up 24 points to 7060.

The Canadian dollar is up 0.0014 to 0.9972 against the U.S. dollar (1.0029 USD/CAD) and is up 1.1000 to 104.4130 against the yen.

The U.S. dollar is up 0.9770 to 104.7270 against the yen and the Dollar Index is up 0.308 to 73.255.

The euro is down 0.0072 to 1.5482 against the U.S. dollar, down 0.0095 to 1.5527 against the Canadian dollar, up 0.0014 to 0.7957 against the pound sterling and is higher by 0.78 to 162.14 against the yen.

The pound sterling is down 0.0124 to 1.9457 against the U.S. dollar and down 0.0149 to 1.9511 against the Canadian dollar.

WTI crude oil is up $1.58 to $125.81.

The front month gold contract at the Chicago Board of Trade is down $18.90 to $866.00 per ounce.

All data taken at 4:18 p.m. EDT.

Generated by CEP Newswires, edited by Nancy Girgis, This email address is being protected from spam bots, you need Javascript enabled to view it