BOND REPORT: Treasurys End Euphoric Week On Down Note; Yields Tip Up

By Laura Mandaro

Treasurys fell Friday, flattened by a bout of optimism on the U.S. economy after the White House unveiled a rescue package for Detroit's automakers and ahead of record auctions next week.

On Friday, the 10-year Treasury note slid 0.1%, with yields (UST10Y) at 2.12%, four basis points higher than levels late Thursday. Yields on the benchmark security, which move inversely to prices, had risen as much 11 basis points earlier.

Still, the rush into Treasurys spurred by the Federal Reserve's aggressive moves to lower interest rates drove 10-year yields nearly a half percentage point down for the week, and they set new lows along the way. As of Thursday, Treasurys had returned 2% for the week, according to Merrill Lynch's index of high-rated U.S. government debt.

In light and choppy trading ahead of a holiday-shortened week, short to medium term Treasurys (UST2YR) took the brunt of selling. Yields on two-year notes rose 4 basis points to 0.73%, three-year note yields gained 9 basis points to 1.03% and five-year notes advanced 8 basis points to 1.36%.

LATIN AMERICAN MARKETS: Equities Unable To Gain Ground After U.S. Reaches Carmaker Deal

By Carla Mozee

Key Latin American stock markets finished lower Friday, unable to log gains after U.S. automakers won an emergency-loan package from the government after months of volatile negotiations.

Brazil's Bovespa fell 1% to 39,131.23, and Mexico's IPC lost 0.6% to 22, 221.64.

Argentina's Merval lost 1.7 % to end at 1,093.57, and Chile's IPSA shed 0.2% to 2,346.46.

Brazil's oil heavyweight Petrobras (PBR) shed 0.6%.

All steel stocks ended lower. Vale (RIO) fell 0.4% and Usiminas lost 0.2%. Gerdau (GGB) shares fell 1.8%, and Companhia Siderurgica Nacional (SID) fell 1.9%.

Moody's Investors Services, which revised outlooks on Gerdau, Gerdau Ameristeel Corp. and CSN's backed notes to stable from positive, said its actions reflect expectations for weakened debt protection metrics as well as rapid deterioration of steel-industry conditions worldwide, said Moody's.

ASIA MARKETS: Hong Kong, Tokyo Stocks Flip-flop

By V. Phani Kumar

Most Asian markets were unsettled Thursday, with stocks in Japan and Hong Kong struggling to hold on to gains after a decline in Wall Street, while energy stocks declined across the region on sliding crude-oil prices.

Honda Motor Co. tumbled in Tokyo a day after it slashed the profit outlook while a strengthened yen hurt other exporters such as Canon Inc.

In Sydney, Commonwealth Bank of Australia shares plummeted as trading resumed after the bank finalized a A$2 billion ($1.4 billion) capital raising plan and after CBA said its loan impairment charges were expected to be higher than analyst estimates.

Chinese property stocks advanced in Hong Kong after Beijing announced measures to stimulate demand for homes Wednesday, but shares of some Hong Kong developers declined as banks held on to their interest rates in spite of a one percentage- point reduction by the Hong Kong Monetary Authority in its key interest rate.

Five Year-end questions for Wall Street

By David Weidner

NEW YORK (Dow Jones) -- Wall Street was forever changed during this year, but it may be a while before we can tell if its more sinister components were on the road to reform or a rebirth.

As we near the end of 2008, investment bankers, traders, investors and everyone connected to our financial system is wondering what will happen next. Will the machine continue to break down, or have we already started down the path to recovery?

No one is willing to bet on the outcome, but some simple questions may soon be answered that will give us a better idea whether the business of investing and dealmaking will regain a place in our society, or whether it will be frozen out by unbridled greed.

What follows are questions about Wall Street, the Wall Street of capital markets, corporate finance, strategic advice and securities. These are not meant to be questions whose answers will tell us about the future of the economy. It's not a discussion of interest rates and taxes and monetary policy.

ASIA MARKETS: Tokyo Stocks Rebound, Hong Kong Stocks Waver

By V. Phani Kumar

Japanese shares advanced Thursday as investors bought into banks and property developers at bargain prices, but Honda Motor Co. declined a day after it slashed the profit outlook while a strengthened yen hurt other exporters such as Canon Inc.

Australian shares dropped after an overnight decline on Wall Street and in crude-oil prices. The market also was weighed down by Commonwealth Bank of Australia, which slumped as trading resumed after the bank finalized a A$2 billion ($1.4 billion) capital raising plan and after CBA said its loan impairment charges were expected to be higher than analyst estimates.

In Tokyo, the Nikkei 225 Average ended the morning trading session up 0.9% at 8,687.04 reversing early losses, while the broader Topix index gained 0.3% to 841.10.