Treasuries fall on economic data; US stocks finish modestly higher

(Bond Market Wrapup for October 25th, 2012) – Treasuries declined Thursday with 10-year yields touching their highest level since September 17, over increased speculation of more Japanese stimulus tomorrow. Improved economic data from the US tempered demand for safer assets after a Commerce Department report on durable goods showed a 9.9 spike in demand in September. A separate Labor Department report showed first time jobless claims dropped 23,000 to 369,000 in the week ended Oct 20. A third report showed pending-home sales rising 0.3 percent in September after a sharp decline in the prior month.

Economic development overseas also supported risk sentiments after preliminary reports from the UK showed GDP grew 1 percent in the third quarter, the fastest rate in five years.  China’s Ministry of Industry and Information Technology said factory output should increase at a faster pace in the final quarter of 2012.

The benchmark 10-year Treasury yield rose four basis points, or 0.04 percentage point, to 1.83 percent. The 30-year Treasury bond yield added three basis points, or 0.03 percentage point, to end at 2.98 percent.

Bond funds fell with the iShares Barclays 20 Year Treasury Bond ETF (TLT) slipping 62 cents, or 0.51 percent, to $120.86, while the Vanguard Total Bond Market ETF (BND) shed 13 cents, or 0.15 percent to close at $84.57.

US stocks finished modestly higher Thursday as investors weighed improved durable goods and jobless claims data against concerns surrounding average corporate earnings.

The Dow Jones Industrial Average (DJIA) climbed 26.34 points, or 0.2 percent, to 13,103.68, its first gain in three days. Breadth within the 30-stock blue-chip index turned positive with winners outpacing laggards 19 to 11. Proctor & Gamble Co (PG) was the biggest gainer in the Dow, rallying 2.9 percent, after the consumer goods major announced mixed results but maintained its outlook for the full year.

Rival consumer products maker Unilever (UL) jumped 2.55 percent after solid third quarter growth in emerging markets offset weakness in developed economies.

The S&P 500 Index (SPX) added 4.22 points, or 0.3 percent, to 1412.97 with energy and healthcare gaining the most and telecommunications and technology hitting the ground hardest among its 10 business groups.

Security software maker Symantec Corp (SYMC) surged 6.7 percent after the firm projected sales that surpassed estimates while Aetna Inc rose 1.1 percent after the health insurer’s Q3 results topped estimates.

The NASDAQ Composite Index (COMP) added 4.42 points, or 0.2 percent, to close at 2986.12.

For every two stocks declining, three advanced on the NYSE.

Oil prices for December delivery gained 32 cents to close at $86.05 a barrel.

Gold futures for December delivery rose $11.40 to $1,713 an ounce.

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