(Bond Market Wrapup for September 24th, 2012) – Treasuries rose Monday, pushing yields down for the sixth straight session as investors grew anxious over reports that Greece’s budget deficit is bigger than reported by its officials and disagreement between France and Germany over a proposed pan-European banking authority broght into focus the challenges that lie ahead.
Record low yields have not deterred US investors concerned that the unprecedented stimulus by the ECB and the US Fed may not succeed in either stimulating the economy or bringing the unemployment rate down. The benchmark 10-year Treasury yield dropped four basis points, or 0.04 percentage point, to 1.72 percent. The 30-year Treasury bond yield fell three basis points, or 0.03 percentage point, to 2.91 percent in late afternoon trading, New York time.
Bond funds closed higher with the iShares Barclays 20 Year Treasury Bond ETF (TLT) added 95 cents, or 0.78 percent, to end at $122.50, while the Vanguard Total Bond Market ETF (BND) gained 9 cents, or 0.11 percent to finish at $84.81.
US stocks edged lower Monday with the S&P 500 sinking for the third straight day as data from Germany and China indicated global recovery is faltering while European leaders while European leaders failed to agree over the proposed banking unification rules.
The Dow Jones Industrial Average (DJIA) shed 20.55 points, or 0.2 percent, to end at 13,558.92. Breadth within the 30-stock index turned negative with decliners outpacing winners 18 to 12. Intel (INTC), Microsoft (MSFT) and Hewlett-Packard led the day’s biggest percentage decliners.
JP Morgan (JPM), Merck (MCK) and AT&T (T) fronted the day’s gainers.
The S&P 500 Index (SPX) fell 3.26 points, or 0.2 percent, to 1456.89 with technology getting hammered the most and utilities pacing the gains among its 10 business groups.
The tech-heavy NASDAQ Composite Index (COMP) declined 19.18 points, or 0.6 percent, to close at 3160.78 after its oversized component Apple Inc (AAPL) sank 1.3 percent as early iPhone 5 sales number fell short of expectations.
Decliners stayed ahead of advancers on the NYSE.
Oil prices for November delivery slipped 96 cents to close at $91.93 a barrel.
Gold futures for December delivery dropped $13.60 to $1,764.40 an ounce.