Treasury yield drops to 12 week low on Europe worries, stocks higher

10-year Treasuries came down from a twelve week high after a rally triggered by concerns over the worsening European debt crisis was tempered by a US economic growth reading.

Yield on the benchmark 10-year note settled 1 basis point, or 0.01 percentage point lower at 1.93 percent, after plunging to a low of 1.88 percent, the lowest since Feb 3.  The 30-year Treasury Bond yield dropped to 3.06 percent, a level not seen since March 29. The US first quarter growth came in at an annualized rate of 2.2 percent, down from 3 percent in the previous quarter even as 10-year notes head towards a six-week stretch of gains, the longest since June.

The iShares Barclays 20 Year Treasury Bond ETF (TLT) rose 0.08 percent to settle at $117.29 for the day, while the Vanguard Total Bond Market ETF (BND) climbed 0.06 percent to close at $83.87.

US stocks advanced Friday, capping a weekly gain as the S&P 500 closed over the 14K mark in nearly a month and the NASDAQ closed 2.3 percent higher for the week. Strong corporate earnings lifted investor confidence, overshadowing a weaker-than-expected report on first quarter economic growth.

The Dow Jones Industrial Average (DJIA) climbed 23.69 points, or 0.2 percent, to 13,228.31, with Cisco Systems (CSCO) topping the gainer’s chart. The index is up 1.5 percent over last Friday, its second straight week of gains. 11 of the Dow’s 30 components closed lower, with Procter & Gamble Co (PG) dropping the most, losing 3.6 percent for the day.

The S&P 500 Index (SPX) rose 3.38 points, or 0.2 percent, to 1403.36 with Expedia (EXPE) and Amazon (AMZN) fronting the day’s top gainers. Expedia surged 23 percent after announcing better-than-expected earnings late Thursday, while Amazon jumped 15 percent after it topped analysts’ expectations.

The tech-heavy NASDAQ Composite Index (COMP) rose 18.59 points, or 0.6 percent, to 3069.20, up 2.3 percent for the week.

For every stock declining, more than two advanced on the NYSE.

Oil prices for June delivery gained 38 cents to end at $104.93 a barrel.

Gold futures for June delivery rose $4.30 to settle at $1,664.80 an ounce.


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