In broad strokes, any good news from Europe is good for US stocks and bad for US Treasury prices.
All three major US stock indexes finished the day a little higher, turning in gains of 0.26% or less. The bond market as represented by the two most widely held bond ETFs, closed slightly lower, less than 0.13% up.
The S&P 500 (ETF: SPY) closed 3 points higher than yesterday at 1,347.05, up 0.2%. The bond market was almost flat as iShares Barclays Aggregate Bond ETF (AGG) finished 11 cents down at $110.53, 0.10% lower than the previous day. (note as bond prices fall, yields increase).
The Dow Jones industrial Average (ETF: DIA) rose 33 points closing at 12,878, up 0.26%. In terms of individual Stocks, shares of Sears (SHLD), the big box retailer of everything from microwaves to quilts rose 6% on rumors that the company was up for sale. The company has been suffering for the last few years under the leaderships of hedge fund manager Eddie Lampert, who has proven that investors don’t make great managers.
British Petroleum (BP) shares fell as the market re-assessed how much the oil spill in the Gulf will end up costing the company. Yum Brands (YUM), the owners of Dunkin Donuts and KFC beet earning expectation on the back of strong sales in China.
In terms of the treasury bond market, the iShares Barclays 20 Year Treasury Bond Fund (TLT) fell 1.24% to $116.27 giving back all of Friday’s gains. Junk bonds rose slightly as represent by the iShares iBoxx $ High Yield Corporate Bond Fund (HYG) ending higher 18 cents at $90.92. Are people starting to reverse their “flight to safety” trade and sell-off treasuries?