(Bond Market Wrapup for June 12th, 2012) Treasuries retreated as the US sold $32 billion in three year notes and Wall Street traders chose to look beyond the ongoing turmoil in the Eurozone.
Treasuries pared some of their early losses after ratings agency Fitch downgraded 18 Spanish banks, boosting demand for safe-haven US assets. Despite rising Italian borrowing costs and coming Greek elections, demand for US debts remained weak with the benchmark yield on 10-year Treasuries rising seven basis points to 1.66 percent. Yield on 30-year Treasury Bonds rose 6 basis points to 2.77 percent. Five year note yields rose five basis points to 0.74 percent.
10 Year Treasury Yield 1 Month Chart
Bond Funds were also down on the day with the iShares Barclays 20 Year Treasury Bond ETF (TLT) dropped $1.15, or 0.91 percent, to close at $124.63, while the Vanguard Total Bond Market ETF (BND) shed 13 cents, or 0.15 percent to finish at $84.10.
TLT 1 Month Chart
US stocks gained more than one percent Tuesday, paring losses suffered Monday as investors speculated on assets purchase by the Federal Reserve and other central banks around the world. The Dow Jones Industrial Average (DJIA) zoomed 162.57 points, or 1.3 percent, to 12,573.80, after losing 142.97 points yesterday. In the Dow, 29 of the 30 components ended higher, led by Boeing (BA), Bank of America (BAC), DuPont (DD) and American Express (AXP). Citigroup (C) and JP Morgan Chase (JPM) were up between 2.5 percent and 4.5 percent. Only United Technologies (UTX) ended lower for the day.
Dow Jones Industrial Average 1 Month Chart
The S&P 500 Index (SPX) rose 15.25 points, or 1.2 percent, to 1324.18 with the financial and the materials sector advancing the most among the 10 business groups.
The tech-heavy NASDAQ Composite (COMP) added 33.34 points, or 1.2 percent, to close at 2843.07. Shares of social gaming company Zynga (ZNGA) sank more than 10 percent on fears of weak revenue.
For every stock declining, three stocks advanced on the NYSE.
Crude oil prices for July delivery gained 62 cents after three down-sessions to close at $83.32 a barrel.
Gold futures for August delivery rose $17 to $1,613.80 an ounce.