Treasuries advance snapping losing streak, stocks extend rally

(Bond Market Recap for August 7th, 2012) Treasuries remained near flat despite rising earlier amid speculations that central banks will intervene to boost growth even as political strains in Europe threaten to worsen the region’s continuing debt crisis.

The benchmark 10-year Treasury yield dropped one basis point, or 0.01 percentage point, to 1.56 percent in late afternoon trading, after shedding as much as three basis points during the day’s trading. Yield on 30-year treasury bonds also slipped one basis point to 2.65 percent on a relatively calm trading day.

10 Year Treasury Yield – 1 Month Chart

Bond funds were up on the day with the iShares Barclays 20 Year Treasury Bond ETF (TLT) rising 5 cents, or 0.04 percent, to close $127.47, while the Vanguard Total Bond Market ETF (BND) gained 8 cents, or 0.09 percent at $84.87.

TLT 1 Month Chart

US stocks extended their rally Monday as investors continued to cheer a better-than-expected jobs report at home and lower Spanish borrowing costs.  The Dow Jones Industrial Average (DJIA) closed 21.34 points or 0.2 percent higher at 13,117.51, off from the day’s high of 13,187. The breadth remained positive with 19 of the blue-chip index’s 30 stocks closing higher, led by Bank of America (BAC) and Cisco (CSCO).  American Express (AXP) and Johnson and Johnson (JNJ) were among the day’s biggest decliners.

Dow Jones Industrial Average 1 Month Chart

The S&P 500 Index (SPX) rose 3.24 points, or 0.2 percent, to 1394.23 with technology and materials advancing the most and utilities hitting the ground hardest among the index’s 10 business groups.

Electronics retailer Best Buy Co (BBY) vaulted 13 percent after its promoter offered to buy the company back for $8.8 billion. Technology and outsourcing company Cognizant Technology jumped 11 percent after topping earnings and revenue estimates.
The NASDAQ Composite Index (COMP) added 22.01 points to close 0.7 percent higher at 2989.91, the highest since May 3.

  • For every stock rising, roughly two advanced on the NYSE.
  • Oil prices for September delivery gained 80 cents to close at $92.20 a barrel.
  • Gold futures for August delivery rose $6.90 to $1,612.90 an ounce.
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