Market Wrap: Both the stock and bond markets got off to a rough start today after Freddie Mac reported 2nd Qtr. losses that were over three times higher than expected. Our benchmark FNMA 6.0% bond ended the session 25bp lower to close at $99.50 but had traded down by as much as 63bp before rallying off of its intraday low. Better than expected results from a $17 billion 10-yr Treasury note auction allowed the bond to bounce back. A prior new auction of 10-yr notes saw a foreign participation level of 28.4% while today's had a better level of 34%. Meanwhile, stocks rebounded from their session lows following the Energy Information Administration's (EIA) weekly report on petroleum inventories. The EIA report showed crude oil inventory rising by 1.7 million barrels vs. expectations of a 1.2 million barrel increase while distillate fuel inventories rose by 2.8 million barrels vs. expectations of 2.3 million barrels. The higher inventory levels prompted a retreat in oil prices to about $118/barrel and this provided a boost for the stock market with the major indices trading modestly higher. The Dow ended 40 points higher to close at 11,656 while the NASDAQ Composite Index gained 28 points to close at 2,378. The broader S&P 500 Index gained 4 points to close at 1,289.