Treasuries fall as EU Summit Approaches; Stocks Up

(Bond Market Wrapup for June 26th, 2012) Treasuries retreated over speculation that European leaders were progressing in resolving the single-currency union crisis. Treasuries recovered from the day’s lowest level after the German Chancellor shot-down proposals for shared-responsibility of debt.

Treasuries yields gained after a housing report showed US home prices rose for the first time in seven months, providing some early relief though a consumer confidence reading came in softer than estimated. Yield on the benchmark 10-year Treasury increased three basis points, or 0.03 percentage points, to 1.63 percent in late afternoon trading, New York time. Yield on 30-year Treasury Bonds rose two basis points to close at 2.70 percent.

10 Year Treasury Yield 1 Month Chart

 

Bond funds were down on the day with the iShares Barclays 20 Year Treasury Bond ETF (TLT) shed 50 cents, or 0.39 percent, to close at $126.34, while the Vanguard Total Bond Market ETF (BND) gained 9 cents, or 0.11 percent to $84.26.

TLT 1 Month Chart

US stocks advanced Tuesday as investors remained cautiously optimistic on signs of the housing market bottoming out though clouds over the EU summit meeting scheduled for later this week continued to weigh on markets.  The Dow Jones Industrial Average (DJIA) climbed 32.01 points, or 0.3 percent, to 12,534.67, after sinking more than 50 points and rising 74 points during the day’s trade. Within the Dow, 18 of the 30 components ended the day higher with JP Morgan Chase (JPM), McDonald’s (MCD), Exxon Mobil (XOM) and Walt Disney (DIS) leading the percentage gainer’s list.   Hewlett Packard (HPQ) and IBM (IBM) were among the biggest losers.

Dow Jones Industrial Average 1 Month Chart

The S&P 500 Index (SPX) rose 6.27 points, or 0.5 percent, to 1319.99 with energy and consumer discretionary advancing the most among its 10 business groups.

The NASDAQ Composite Index (COMP) added 17.90 points, or 0.6 percent, to close at 2854.06.

For every stock declining, more than two advanced on the NYSE.

Oil prices for August delivery gained 14 cents to close at $79.35 a barrel.

Gold futures for August delivery dropped $13.50 to $1,574.90 an ounce.

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