U.S. stocks and exchange traded funds (ETFs) are barely in the black this morning, despite concerns on the outlook of the nation’s economy.

U.S. Treasuries fell and the dollar weakened against the euro as investors got more concerned of the effects that high interest rates that the government faces on money borrowed to finance the bailout of U.S. financial institutions will have on the overall economy.

Many prominent financial gurus, such as Pimco’s Bill Gross, suggest that the spending in Washington is so frivolous that it may eventually cause the nation to lose its AAA credit rating, something that the British are already fearing.  This would make lift borrowing costs, possibly spur inflation and make it even harder to dig us out of our current financial mess.  Treasury Secretary Timothy Geithner doesn’t think that this will happen.

To help curtail the enormous amount of spending in Washington, President Barack Obama is making some adjustments.  He just signed a bill into law that will tighten the controls on defense spending.  His motivation behind this law was a study that outlined nearly $295 billion of taxpayer’s money that was wasted on cost overruns involving 95 defense programs, states the Associated Press.  This news sent the PowerShares Aerospace & Defense (PPA) down nearly 0.4% in intraday trading.

Black gold continues to stay at elevated levels, despite a weakening dollar.  The volatile commodity stayed above $61/barrel on the New York Mercantile Exchange on supply concerns fueled by two refinery fires in the United States and fighting by the government and rebels in Nigeria, tates Pablo Gorondi of the Associated Press.  As a result, the United States Oil Fund (USO) gained 0.1% in morning trading.

The Dow Jones Industrial Average was up 0.8%, the S&P 500 gained 0.7% and the Nasdaq jumped 0.5% in morning trading.

Kevin Grewal contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.