PORT WASHINGTON, New York (MarketWatch) -- Although you wouldn't know it from the behavior of the stock market, the economic outlook is turning just a bit less gloomy.

A benchmark for tracking the dollar threatens to end its longest rally in two decades as lackluster U.S. data as well as Greece and Spain divide attention.

Treasury prices rise after the Philadelphia Federal Reserve’s index shows an unexpected contraction in manufacturing in the region.

NEW YORK -(MarketWatch)- Standard & Poor's raised its outlook on Ally Financial Inc. to positive from stable Thursday as it expects the prearranged bankruptcy of its mortgage subsidiary to help it address mounting litigation risk.

Europe’s problems are well-documented, although there is some sentiment that disaster can be averted. However, the dangers are real enough that any exposure to small- and mid-sized European banks should be reconsidered.

NEW YORK (MarketWatch) -- Yields on benchmark 10-year Treasury notes on Thursday touched their lowest level ever on a closing basis, as weak U.S. data and worries about Greece and Spain converged to prompt investors to favor the safe-haven status of U.S. bonds. Yields on 10-year notes , which move inversely to prices, fell 5 basis points to 1.71%, matching their lowest close ever, set in September. Analysts said last fall they traded below that intraday. Most Treasury dealers don't cut off trading for at least another hour.

NEW YORK (MarketWatch) -- The Treasury Department sold $13 billion in 10-year Treasury Inflation Protected Securities on Thursday at a yield of -0.391%, the fourth straight time TIPS of this maturity have come at a negative yield. TIPS pay investors a coupon plus the rate of inflation determined by a government index. Bidders offered to buy an average of 3.01 times the amount of debt sold, up from the average of 2.77 times at the last six comparable sales, according to CRT Capital Group. Indirect bidders, a group which includes foreign central banks, bought 50.7% of the sale, compared to 40.1% on average. Direct bidders, a group which includes domestic money managers, purchased another 14.8% versus an average of 13.5%. After the auction, the broader bond market held onto gains. Yields on 10-year notes , which move inversely to prices, fell 3 basis points to 1.74%.

Europe’s stock markets push lower to end a fourth session in the red as shares of Spanish lender Bankia tumble.

Fixed-rate mortgage rates hit yet another set of record lows this week, with the 30-year fixed-rate mortgage averaging 3.79% in Freddie Mac’s weekly survey of conforming mortgage rates.

WASHINGTON (MarketWatch) - Mortgage rates hit record lows in the week ending May 17, with the 30-year fixed-rate mortgage average falling to 3.79% from 3.83% in the prior week, Freddie Mac said Thursday in its weekly report. These data go back to 1971. The rate was 4.61% a year earlier. To obtain the latest 30-year rate, payment of an average 0.7 point was required, according to Freddie, a buyer of residential mortgages. The 15-year fixed-rate mortgage also fell to a record low, ticking down to 3.04% in the most recent week, compared with 3.05% in the prior week. These data go back to 1991. "The European debt crisis overshadowed improving economic indicators for the U.S. and allowed Treasury bond yields and fixed mortgage rates to ease for another week," said Frank Nothaft, chief economist at Freddie Mac. Meanwhile, the average rate on the 5-year Treasury-indexed hybrid adjustable-rate mortgage increased to 2.83% from 2.81%. The 1-year Treasury-indexed ARM rose to 2.78% from 2.73% in the prior week.