Treasuries Advance on Stimulus Hopes, Stocks Rise

(Bond Market Wrapup for June 15th, 2012) Treasuries extended a weekly gain on a Federal Reserve Bank of New York report that showed the Empire State Manufacturing Index fell sharply to 2.3 in June from 17.1 in May while consumer confidence index dropped to 74.1 in June, the least since Dec.

Treasuries pared earlier yield gains as investors remained worried about a possible contagion if Greece moved closer to an exit following Sunday’s elections. The benchmark 10-year yield dropped six basis points, or 0.06 percentage points, to 1.58 percent in late afternoon trade, New York time. Yield on 30-year Treasury Bonds fell five basis points to 2.69 percent. Yield on 10-year notes is down six basis points on the week.

10 Year Treasury Yield 1 Month Chart

The iShares Barclays 20 Year Treasury Bond ETF (TLT) added 70 cents, or 0.56 percent, to close at $126.40 while the Vanguard Total Bond Market ETF (BND) gained 19 cents, or 0.23 percent to finish at $84.42.

TLT 1 Month Chart 

US stocks closed higher Friday, posting back-to-back weekly gains for the first time since April on hopes that central banks around the world will open liquidity channels if needed after Sunday’s Greece elections.  The Dow Jones Industrial Average (DJIA) added 115.26 points, or 0.9 percent, to 12,767.17, up 1.7 percent for the week. Among the Dow’s 30 components, 26 gained, led by Microsoft (MSFT), IBM (IBM) and Chevron (CVX). Home Depot (HD) and Verizon (VZ) were the biggest losers. Microsoft rose two percent after the WSJ reported the software giant has agreed to buy Yammer.

Dow Jones Industrial Average 1 Month Chart

The S&P 500 (SPX) rose 13.74 points, or one percent, to 1342.84, finishing 1.3 percent higher over last Friday. Financials gained the most amid stimulus talks while energy, technology and basic materials also progressed among the index’s 10 business groups.

The NASDAQ Composite (COMP) added 36.47 points, or 1.3 percent, to close at 2872.80, capping two consecutive weekly gains for the first time since March end.

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

Oil prices for July delivery climbed 12 cents to close at $84.03 a barrel.

Gold futures for August delivery edged up $8.50 to $1,628.10 an ounce.  

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