In the broader CDS universe, wideners outpaced tighteners by 3-to-2 with a notable split across credit quality as distressed (CCC+ and below) outperforming and 'safe' A- and above underperforming on average. This trend became more exaggerated as the day carried on. By sector, Gaming names remained solid performers (perhaps some rerisking on the MGM auction or the pick up in Las Vegas gaming revenues), but Sports & Rec helped drag the broad Leisure sector wider on average.

Cable names outperformed helping the Media sector improve notably today as the Homebuilders helped drag non-cyclicals tighter on the day. Capital Goods (construction machinery and business supplies worst) and Healthcare were the worst performers on the day as Energy and Utilities saw some buying with the Independent producers doing well.

A trend we noted intraday was the gradual weakening from early strength among the apparel names as well as a bifurcation between banks and REITs (the latter underperforming) but across the broad universe markets were pretty balanced and relatively quiet ahead of tomorrow's holiday.

The MGM LCDS auction settled today at $58.5 which is one of the lowest LCDS auctions on our records and slightly lower than the $60 levels we heard in the last few days (seems like most had managed their CLO exposure).

One notable divergence was the gap between the Jan2010 and Jan 2011 implied correlation (S&P vol not credit-based) which implies smoother sailing into year-end with any fear of a crash being pushed off to next year (maybe another contrarian signal?).

The names having the largest impact on IG are American International Group, Inc. (-22.13bps) pushing IG 0.14bps tighter, and Cardinal Health Inc. (+8.5bps) adding 0.07bps to IG. HVOL is more sensitive with American International Group, Inc. pushing it 0.62bps tighter, and Alcoa Inc. contributing 0.18bps to HVOL's change today. The less volatile ExHVOL's move today is driven by both FirstEnergy Corp (-9.75bps) pushing the index 0.1bps tighter, and Cardinal Health Inc. (+8.5bps) adding 0.09bps to ExHVOL.

The price of investment grade credit rose 0% to around 100.07% of par, while the price of high yield credits rose 0.25% to around 93.88% of par. ABX market prices are lower by 0.03% of par or in absolute terms, 0.27%. Broadly speaking, CMBX market prices are lower by 0.39% of par or in absolute terms, 0.07%.