(Bond Market Wrapup for October 15th, 2012) – Treasury prices turned lower pushing yields up as the US retail sales number rose more than estimated in September, offsetting fiscal cliff worries. Risk appetite got a boost after a Commerce Department report showed retail sales grew a seasonally-adjusted 1.1 percent in September, slightly beating forecasts. Also a separate report revealed the Federal Reserve Bank of New York’s Empire State Manufacturing Index improved to minus 6.2 in October from minus 10.4 in September, showing marginal improvement in manufacturing activity in New York even though business inventories edged higher in August.
The benchmark 10-year Treasury yield rose one basis point, or 0.01 percentage point, to 1.66 percent while yield on 30-year Treasury bonds rose two basis points, or 0.02 percentage points, to 2.85 percent in late afternoon trade, New York time.
Bond funds tanked with the iShares Barclays 20 Year Treasury Bond ETF (TLT) losing 28 cents, or 0.23 percent, to settle at $123.69 while the Vanguard Total Bond Market ETF (BND) tripped 3 cents, or 0.04 percent to end at $84.97.
US stocks rallied Monday after the retail sales reading for September came in stronger than anticipated and Citigroup delivered consensus-beating quarterly earnings.
The Dow Jones Industrial Average (DJIA) rose 95.38 points, or 0.7 percent, to 13,424.23, to post its second consecutive gain with 25 of its 30 components finishing higher.
Banking and healthcare stocks gained the most with shares of Bank of America (BAC) jumping a chart-topping 3.5 percent and Merck & Co following up with a 2.1 percent gain. AT&T (T) was the biggest percentage decliner, slipping 1.2 percent on the day.
The S&P 500 Index (SPX) added 11.54 points, or 0.8 percent, to 1440.13 with healthcare pacing the gains and telecom hitting the ground hardest among its 10 business groups. Eli Lilly (LLY), Abbot Laboratories (ABT) and Bristol Myers Squibb (BMY) added between 4.1 percent and 2.5 percent for the day.
Snapping its six-session long losing streak, the tech-heavy NASDAQ Composite Index (COMP) jumped 20.07 points, or 0.7 percent, to close at 3064.18.
For every stock declining, two advanced on the NYSE.
Oil prices for November delivery shed 1 cent to close at $91.83 a barrel.
Gold futures for December delivery slipped $22.10 to $1,737.60 an ounce.