Treasuries Fall as Auto Sales & Factory Orders Rise, Stocks Rally

(Bond Market Recap for July 3rd, 2012) Treasuries fell as demand for safe haven assets eased following a government report that showed US factory orders rose 0.7 percent in May for the first time in three months.  US automakers also reported strong June sales figures Tuesday. Ford (F) sales rose 7 percent while Chrysler sold 20 percent more vehicles over the same period last year. Sales of General Motors (GM) were higher 16 percent while Toyota (TM) sales for June grew by a whopping 60 percent.

The yield on 10-year benchmark notes rose 4 basis points to 1.63 percent in mid-afternoon trading, New York time. The 30-year Treasury Bond yield climbed six basis points to 2.74 percent.

Bond Funds were down on the day with the iShares Barclays 20 Year Treasury Bond ETF (TLT) dropping 97 cents, or 0.77 percent, to close at $125.25, while the Vanguard Total Bond Market ETF (BND) fell 12 cents, or 0.14 percent to close at $84.25.

US stocks surged Tuesday after closing mixed Monday as investors cheered an increase in auto sales and strong factory orders for May. Materials and commodities prices rallied, pushing stocks of materials and energy up.  The Dow Jones Industrial Average (DJIA) zoomed 72.43 points, or 0.6 percent, to 12,943.82, after closing marginally lower Monday on weak ISM data. Within the Dow, 23 of the blue-chip’s 30 components closed higher with Alcoa (AA), Wal-Mart (WMT) and Caterpillar (CAT) leading the percentage gainers list.  Home Depot (HD) declined the most on Dow, losing more than 2 percent on the day.

The S&P 500 Index (SPX) rose 8.51 points, or 0.6 percent, to 1374.02 with energy, utility and basic materials advancing the most among its 10 major business sectors. EOG Resources Inc (EOG) and Alpha Natural Resources Inc (ANR) led gains on the index, adding 6.7 percent and 6.4 percent respectively.

The tech-heavy NASDAQ Composite (COMP) added 25.37 points, or 0.9 percent, to close at 2935.69.

For every stock declining, nearly three advanced on the NYSE.

Crude oil prices for August delivery gained $3.91 to close at $87.66 a barrel.

Gold futures for August delivery rose $24.10 to $1,621.80 an ounce.

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