Treasuries were higher Monday despite strength in stocks. The bond market was lifted in expectations the Fed will again cut rates sharply on Tuesday. The 30-year bond was outperforming in the wake of another spate of gloomy economic data after last week's severe correction.
Yet another grim piece of economic news was released Monday. A key barometer of business activity in services and other sectors declined sharply in October after the terrorist attacks on New York and Washington. The National Association of Purchasing Managers' non-manufacturing index fell to 40.6 in Oct from 50.2 in September. Any number below 50 represents a contraction. The index was well below its six-month average of 47.3 with weakness widespread, particularly in the communication, wholesale trade, agriculture, transportation and construction sectors.