It felt like September 2008 and investors didn't like it.  Combine the ongoing debt crisis in Europe with the largest financial regulatory overhaul in the USA since the 1930s and the end result was a flood of stock sellers on Thursday (5/20/10).  The S&P 500 fell 3.9%, the stock index's largest percentage drop in 13 months.  That 1-day performance was worse than 99.4% of all trading days in the last 25 years.  The following day's bounce back produced a +2.1% gain, only increasing the anticipation of what will happen next in the US stock market (source: BTN Research).   
 
As worldwide investors sought the safety of US Treasuries, bond prices rose and yields fell.  The 3.22% yield on the 10-year Treasury note and the 4.84% average interest rate on 30-year fixed rate mortgages from last week were calendar year 2010 lows (source: Treasury Department).  
 
The Senate passed its own version of financial regulatory reform on Thursday (59-39 vote).  4 Republicans sided with the Democrat majority (2 Democrats voted against the bill), setting the stage for a House/Senate conference committee to combine the 2 bills.  The House passed its version of this bill on 12/11/09.  Banks view the changes to their derivatives business as spelled out by the Senate bill as particularly damaging to their industry (source: Senate).