Monday prove to be a quiet defensive session. The administration, citing the slow economy, raised its fiscal-year deficit projection by $89 billion to $1.8 trillion, borrowing 46 cents for each dollar the government spends. The 2010 deficit is pegged at $1.3 trillion. Otherwise, the only news in the session was stock and debt issuance. Several banks issued stock following stress-test related issuance on Friday where demand proved very strong. Microsoft also tapped the debt market for the first time, selling $3.75 billion in 5-, 10-, and 30-year notes.
Stocks fell back amid questions whether Friday's big gains were overdone. The S&P 500 fell 2.2% to 909. Oil also fell back a bit, ending at $58.15. Gold was steady at $914. The dollar firmed slightly from Friday's selloff to end at $1.3582 against the euro. Demand for the safety of Treasuries picked up with the 10-year yield down 12 basis points to 3.16 percent.