Selling was rampant, with prices falling and yields, which move in the opposite direction of prices, rising across the board. Traders may be extra-sensitive to economic news due to the proximity of the Fed meeting, which occurs Tuesday, March 28. First-time unemployment claims plunged unexpectedly, adding to what appears to be growing economic strength. Today's increases in yields, however, had only minor impact on mortgage rates, which held near recent levels.

Surprisingly strong existing home sales put pressure on Treasuries. Sales in February climbed 5.2 percent to an annual rate of 6.91 million units -- the biggest percentage gain in two years. Although warm weather was cited as a sales catalyst, other data were positive, as well. The median home price rose 10.6 percent to $209,000 and home sales climbed in three of four regions, but inventories of unsold homes were also on the increase. Existing homes sales account for about 85 percent of all homes sold.

First-time unemployment claims for the week ended March 18 fell by 11,000 to 302,000 -- the first decline in four weeks -- when analysts were expecting a drop of only 4,000. But the more closely watched four-week average, which eliminates peaks and valleys, rose to 305,000. Continued claims -- benefits paid to people for more than one week -- rose by 38,000 to 2.47 million.

Wall Street worries

Escalating interest rates, rising oil prices and an unexpected jump in existing home sales had Wall Street denizens wondering about profitability in this type of environment and what the Fed might do to slow it down. As a result, investors locked in yesterday's gains.

Oil prices went on a binge, rising $2.18 to $63.95 a barrel. Although some chalked up the increase to a delayed reaction to yesterday's announced lower crude inventories, the increase was more likely due to supply concerns. Continuing uncertainty regarding militant attacks in Nigeria and the dispositions of Iran and Iraq resulted in the huge price surge. Although weighing on the markets as a whole, increased oil prices boosted shares of oil and oil services companies.

Stocks were somewhat volatile, but closed well off their lows of the session. Declines in transportation, due to higher oil prices, weighed on the markets, but home builders had a great day due to strong February sales. The Dow Jones home construction index rose 3.8 percent. The fact that Home Depot led the Dow Jones industrials with a 1 percent gain was probably not coincidental. Wal-Mart and 3M added 0.9 percent each, but other gains were modest. GM put up big numbers early, on news that it had sold the majority stake in the commercial mortgage division of its GMAC finance unit, GMAC Commercial Holding Inc., but excitement dwindled, leaving the automaker with the smallest of gains.

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