Treasuries advance over weak economic data, stocks retreat

(April 19th, 2012) Treasuries advanced for the second day in a row as existing home sales and US jobless claims fell short of expectations, spurring demand for safe haven assets.

The benchmark US 10-year Treasury yield dropped below the 2 percent for the fifth day as French and Spanish bond auctions received lukewarm response, underlining the fact that European crises that drove borrowing costs higher for the two countries are far from over. US 10-year yields dropped two percentage points, or 0.02 basis points to 1.96 percent. The 10 Year yield has remained between 1.94 and 2.07 percent since April 7.

The Vanguard Total Bond Market ETF (BND) slipped 0.02 point, or 0.02 percent, for the day while the iShares Barclays 20 Year Treasury Bond ETF (TLT) rose 0.11 point, or 0.09 percent.

Stocks closed lower for the second straight day Thursday as weak economic data and unease over Europe overshadowed positive Q1 earnings, pushing NASDAQ into the negative territory for the second week.

The Dow Jones Industrial Average (DJIA) dropped 68.65 points, or 0.5 percent, to 12,964.10, breaching the psychologically important 13,000 level and leaving it up 0.9 percent for the week. The blue-chip index was dragged down by Alcoa (AA) and McDonalds (MCD), though Verizon (VZ) and Travelers (TRV) zoomed after beating earnings estimates.

The S&P 500 Index (SPX) shed 8.22 points, or 0.6 percent, to 1376.92 with the technology sector faring the worst and telecommunications gaining the most among its 10 industry sectors.

Biotech firm Human Genome Sciences (HGSI) refused a $2.6 billion takeover bid from pharmaceuticals major GlaxoSmithKline citing low offer price. HGS shares soared 97 percent following the news.

The NASDAQ Composite Index (COMP) tumbled 23.89 points, or 0.8 percent, to settle at 3007.56 though e-retailer eBay (EBAY) zoomed 13 percent after the company reported stronger-than-estimated Q1 results and upgraded its outlook for 2012.

For every stock that advanced, nearly three retreated on the NYSE.

Crude futures for May delivery dropped $0.40 or 40 cents to end at $102.27 a barrel.

Gold futures for April delivery climbed a modest $1.80 to close at $1,640.60 an ounce.

 

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