The Big Bad Bond Index, which tracks the bonds of blue-chip companies, closed today down 1 point at $1146.69. The index had 19 bonds close in positive territory and 10 bonds that closed lower than the previous day. The average yield for the index remained at 2.24%.
The day’ biggest gainer was ATT’s 6.4% coupon bond maturing on 5/2038 which jumped in value by $18. The stock of the company rose slightly, after the announcement that it would be limiting download speeds for heavy wireless data users. The heavy users of mobile devices tend to hog up bandwidth, decreasing speeds for all users. While this is a good move for most customers, it may lead to heavy users migrating to Sprint, where there are not such limits. Modestly higher were the bonds of Wal-Mart (WMT) and Home Depot (HD).
The biggest loser of the day was Verizon’s (VZ) 8.75% coupon bond maturing 11/2018 which lost $34 per bond. The company announced a 50 cent quarterly dividend, unchanged from the last quarter. Other losers included, Travelers (TRV) and United Technologies (UTX). The Motley Fool raised a red flag about UTX today expressing concerns about the amount of good will, almost $22 billion, the firm carried on its balance sheet.
The 2, 5, 10, and 30 year treasury all gained value, The yield on the 10 year closed at 1.97%, losing 0.05% of yield. The movement of the BBBI and treasury market were not aligned today.