(April 3rd, 2012) Treasuries fell after the minutes of Federal Reserve Open Market Committee showed policy makers were not as committed to QE3 as the bond market was anticipating. The benchmark ten-year yield climbed 0.10 percent, or 10 basis points, to 2.29 percent, the highest level since March 26. Yields on 30-year Treasury bonds climbed eight basis points to 3.42 percent while 5-year notes added 10 basis points to 1.11 percent. These are large one day moves for the bond market.
The iShares Barclays 20 Year Treasury Bond ETF (TLT) shed 1.95 points, or 1.73 percent for the day, while the Vanguard Total Bond Market ETF (BND) dropped 0.31 points, or 0.37 percent over yesterday’s close.
US stocks also dropped Tuesday with the Dow Jones Industrial Average retreating for the first time in four sessions also on the back of a less aggressive than expected FOMC minutes.
The Dow Jones Industrial Average (DJIA) dropped 64.94 points, or 0.5 percent, to 13,199.50. Financials dropped the most with Bank of America (BAC), Morgan Stanley (MS), JPMorgan Chase (JPM), and Goldman Sachs (GS) all shedding more than 1 percent.
Automobile sales remained in focus throughout the day as March proved a robust month for carmakers. Domestic producer Chrysler reported 34 percent growth in US sales while General Motors Co (GM) reported 12 percent rise in sales. Ford Motor Co (F) said sales were higher 5 percent for the month.
The S&P 500 Index (SPX) shed 5.88 points, or 0.4 percent, to 1413.16 with utilities in the 10-sector index taking the smallest hit and energies dropping the most.
The tech-heavy NASDAQ Composite (COMP) declined 6.13 points, or 0.2 percent, to close at 3113.57 after shares of Apple Inc (AAPL) hit new all time highs.
For every stock advancing, nearly two stocks declined on the NYSE.
Oil prices for May delivery dropped $1.11 to close at $104.01 a barrel.
Gold futures for June delivery declined $7.70 to end $1,672 an ounce.