Stocks Mostly Lower into Final Hour on Continuing Worries Over Rates and Oil

BOTTOM LINE: The Portfolio is slightly lower into the final hour on losses in my Internet longs and Semi longs. I added (IWM) and (QQQQ) shorts today, thus leaving the Portfolio 75% net long. The tone of the market is mixed as the advance/decline line is slightly lower, sector performance is mixed and volume is above-average. The average 30-year mortgage rate rose to 6.35% this week from 6.32% the prior week. This is still lower than the 6.37% three weeks ago. Mortgage rates are now 114 basis points away from record lows set in June 2003. The yield on the 10-year Treasury note is still below levels seen in June 2004. I continue to expect mortgage rates to remain relatively low by historic standards this year as U.S. growth slows to average levels, demand for U.S. assets increases, inflation readings decelerate and the dollar remains stable. I expect US stocks to trade mixed into the close from current levels as short-covering offsets profit-taking.