(Bond Market Wrapup for September 19th, 2012) – Treasuries rose for the third straight day, recouping most of the losses recorded since the Fed’s stimulus announcement last week as investor’s grew pessimistic over the economy’s growth despite the central bank’s recent efforts.
The yield on the benchmark 10-year Treasury notes fell three basis points, or 0.03 percentage points, to 1.78 percent, almost touching Sep 12’s pre-stimulus level of 1.76 percent before hitting 1.89 percent two days later. Treasury bonds also rose for the third day, posting its longest winning streak this month. 30-year Treasury bond yields declined three basis points to 2.97 percent in late afternoon trading, New York time.
Bond funds also edged higher with the iShares Barclays 20 Year Treasury Bond ETF (TLT) added 79 cents, or 0.66 percent, to settle at $121.11 while the Vanguard Total Bond Market ETF (BND) rose 11 cents, or 0.13 percent to close at $84.61.
US stocks ended marginally higher Wednesday snapping a two-day decline as the Bank of Japan increased its assets purchase target by JPY 10 trillion and US existing home sales rose more than forecast.
Earlier stocks had started on a weak note after a Commerce Department report showed housing starts grew 2.3 percent in August to an adjusted annual rate of 750,000, falling short of the expected 775,000 pace while the number of building permits also came in weaker than anticipated. Moods turned bullish however, after a report from National Association of Realtors showed sales of existing homes rose 7.8 percent in August to a seasonally adjusted annual rate of 4.82 million, beating economists’ estimate of about 4.6 million surveyed by Bloomberg.
The Dow Jones Industrial Average (DJIA) climbed 13.32 points, or 0.1 percent, to 13,577.96 with Walt Disney (DIS) and Home Depot (HD) fronting the gainers. Breadth within the 30-stock index turned positive with winners outrunning decliners 18 to 11. American Express (AXP) finished unchanged.
Intel (INTC) and Hewlett Packard (HPQ) were among the notable decliners.
The S&P 500 Index (SPX) added 1.73 points, or 0.12 percent, to 1461.05 with consumer discretionary stocks pacing the gainers and energy lagging among its 10 business groups.
The NASDAQ Composite Index (COMP) added 4.82 points, or 0.15 percent, to close at 3182.62.
For every three stocks declining, four advanced on the NYSE.
Oil prices for October delivery tumbled 3.5 percent to close at $91.98 a barrel.
Gold futures for December delivery rose 50 cents to $1,772.70 an ounce.