10-year Treasuries made their biggest gain in four weeks amid fears of a global slowdown, driving the demand for US safe-haven assets higher. Yields on US assets tumbled following a Labor Department report that showed jobs fell short of forecasts in March, fueling speculations of further rounds of quantitative easing by the Federal Reserve.
Ten year treasury yields dropped from 2.19% on Thursday to 2.05% on the close today after an abbreviated day of trading on Friday where a government report on additions to non farm payrolls came in weaker than expected. 30-year bond yields dropped to 3.17 percent from 3.32% on Thursday.
The iShares Barclays 20 Year Treasury Bond ETF (TLT) surged 2.64 points, or 2.34 percent, for the day, while the Vanguard Total Bond Market ETF (BND) gained 0.29 points, or 0.35 percent, over Thursday’s close.
US stocks suffered their biggest loss in a month Monday, reacting on the first trading day also on the back of the March nonfarm payrolls report that showed companies added fewer jobs than expected. Analysts attributed the pull-back to profit taking by investors, stating that the average job increase this year is still above 200,000 per month.
The Dow Jones Industrial Average (DJIA) tanked 130.55 points, or 1 percent, to 12,929.59, with the Bank of America Corp (BAC) leading the decliner’s table. 28 stocks of the 30-component index retreated despite a couple of billion-dollar deal announcements. AOL (AOL) shares soared 43 percent after the company said it has agreed to sell over 800 patents to Microsoft (MSFT) for about $1 billion in an all-cash deal.
Separately, Facebook announced the acquisition of photo network Instagram for $1 billion in cash and stock.
The S&P 500 Index (SPX) shed 15.88 points, or 1.1 percent, to close at 1382.20, with the financial and the industrial sectors retreating the most. Every segment in the 10-sector index closed lower.
The NASDAQ Composite (COMP) tumbled 33.42 points, or 1.1 percent, to close at 3047.08.
For every stock advancing, nearly four stocks declined on the NYSE.
Oil prices for May delivery dropped 85 cents to close at $102.46 a barrel amid optimism that a military action on Iran can be averted.
Gold futures for April delivery climbed $14 to $1,642.50 an ounce.