(Bond Market Wrapup for November 19th, 2012) – Treasuries drifted lower, pushing up yields of 10-year notes from a two-month low as optimism grew that leaders in Washington will find common ground to avert a set of year-end fiscal deadlines.
Treasuries declined after a report by the National Association of Realtors showed sales of previously owned homes increased 2.1 percent to 4.79 million in October despite the impact of Superstorm Sandy. Also the Wells Fargo/National Association of Home Builders index of builder’s confidence rose for a seventh straight month to 46, the highest since May 2006.
The benchmark 10-year yield climbed three basis points, or 0.03 percentage point, to 1.61 percent while yield on 30-year Treasury bonds rose four basis points, or 0.04 percentage point, to 2.76 percent.
Bond funds were mostly lower with the iShares Barclays 20 Year Treasury Bond ETF (TLT) losing 71 cents, or 0.56 percent, to close at $125.66, while the Vanguard Total Bond Market ETF (BND) changed little to finish at $84.95.
US stocks soared Tuesday to post their biggest gain in months as positive housing data gave further boost to a rally fuelled by investor optimism over budget negotiations in Washington.
The Dow Jones Industrial Average (DJIA) jumped 207.65 points, or 1.7 percent, to 12,795.96, with all its 30 components rising and financial stocks making the most gains. Bank of America (BAC) and JP Morgan Chase (JPM) added 4.06 percent and 2.68 percent, respectively, on upbeat housing data.
Cisco Systems Inc (CSCO) climbed 1.73 percent after the networking major said it would acquire Meraki Inc for $1.2 billion.
The S&P 500 Index (SPX) rose 27.01 points, or 1.99 percent, to 1386.89 with all the 10 sectors but utility finishing the day higher.
The NASDAQ Composite Index (COMP) added 62.94 points, or 2.2 percent, to close at 2916.07, its highest gain since September 6, when markets surged on ECB’s plan to buy bonds from the secondary markets. Index component Apple Inc (AAPL) more than seven percent
For every stock declining, more than seven gained on the NYSE.
Oil prices for January delivery gained $2.36 to close at $89.28 a barrel.
Gold futures for December delivery rose $19.70 to $1,734.40 an ounce.