Treasuries trade at near three-week highs as jobs data offsets Europe, stocks edge higher

(Bond Market Wrapup for October 3rd, 2012) – US Treasury yields traded near a three week low after Spain’s Economy Minister added to the ongoing uncertainty. Addressing a press conference in Madrid, Luis de Guindos said the country won’t recover unless doubts about the euro’s future are answered. Spanish Prime Minister Mariano Rajoy had trashed media reports yesterday that claimed Madrid is ready to seek help by this weekend.

The yield on the benchmark 10-year Treasury notes had reached 1.60 percent earlier despite the ISM non-manufacturing index, which covers about 90 percent of the economy, rising to 55.1 in September from 53.7 in August, the most since March. The ADP Employer Services report showed employers added 162,000 jobs in September, lower than the prior month’s revised estimate of 189,000, but higher than forecasts made by most economists.

The 10-year yield fell one basis point, or 0.01 percentage point, to 1.61 percent while yield on 30-year Treasury bonds remained unchanged at 2.82 percent.

Bond funds had a mixed day with the iShares Barclays 20 Year Treasury Bond ETF (TLT) rose 4 cents, or 0.03 percent, to $124.29, while the Vanguard Total Bond Market ETF (BND) shed 3 cents, or 0.04 percent to settle at $85.01.

US stocks made marginal gains Wednesday as investors welcomed improved services sector and payroll data, but gains were tempered by concerns about China’s economy.

The Dow Jones Industrial Average (DJIA) settled 12.25 points, or 0.1 percent, higher at 13,494.61, giving away most of its 54 points gain. Breadth within the 30 stock blue-chip index was positive with winners outpacing losers 21 to 9. Home Depot (HD) paced the percentage gainers, adding 2.4 percent for the day.

Hewlett-Packard (HPQ) was the biggest percentage decliner, falling nearly 13 percent to close at a nearly 10-year low. The stock plunged after CEO Meg Whitman warned 2013 adjusted-earnings would be lower before her efforts to “fix and rebuild” starts to kick in.

The S&P 500 Index (SPX) rose 5.24 points, or 0.4 percent, to 1450.99, posting its third straight day of gains with telecommunications and financials rising the most and energy and materials sinking among its 10 business groups

Off from its session highs, the NASDAQ Composite Index (COMP) logged its second consecutive win and added 15.19 points, or 0.5 percent, to close at 3135.23,.

Decliners managed to pull ahead of advancers on the NYSE.

Oil prices for November delivery gained $3.75 to close at $88.14 a barrel.

Gold futures for December delivery rose $4.20 to $1,779.90 an ounce.

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