(Bond Market Recap for August 21st, 2012) Treasury 10-year yields slipped from a three-month high as investors sought refuge in safe-haven assets after a decline in equities restarted the debate whether Europe would move fast enough to contain the region’s debt crisis.
Treasury yields had risen earlier amid reports that a senior lawmaker from Angela Merkel’s party said Tuesday concessions are possible for Greece as long as the govt. shows willingness to meet austerity targets amid waning bets the US Federal Reserve will add further stimulus. The benchmark 10-year Treasury yields traded less than one basis point lower at 1.80 percent. 30-year treasury bonds dropped two basis points, or 0.02 percentage point, to 2.91 percent in late afternoon trading.
10 Year Treasury Yield – 1 Month Chart
Bond Funds were up on the day with the iShares Barclays 20 Year Treasury Bond ETF (TLT) adding 54 cents, or 0.44 percent, to $122.39, while the Vanguard Total Bond Market ETF (BND) gained 15 cents, or 0.18 percent to finish at $84.34.
TLT 1 Month Chart
US stocks turned lower Tuesday with the S&P 500 dropping from its four-year high as tech stocks led by Apple led the decline, overshadowing optimism that Europe would move to contain its debt crisis. The Dow Jones Industrial Average (DJIA) slumped 68.06 points, or 0.5 percent, to 13,203.58, after rising 59 points during the day’s session. Within the Dow, breadth turned negative with 22 of the 30 stocks in the blue-chip index closing lower, led by Hewlett-Packard (HPQ), Verizon (VRZ) and Walt Disney (DIS). McDonalds (MCD), Kraft Foods (KFT) ad JP Morgan Chase were among the day’s biggest gainers.
Dow Jones Industrial Average – 1 Month Chart
The S&P 500 Index (SPX) slipped 4.96 points, or 0.4 percent, to 1413.17 with technology, utilities and telecommunication leading the decliners while capital goods and basic materials paced the gainers among its 10 business groups. The tech-heavy NASDAQ Composite (COMP) shed 8.95 points, or 0.3 percent, to close at 3067.26 after Apple Inc (AAPL) slid 1.4 percent amid reports the tech company has failed to settle a patent dispute with South Korea’s Samsung Electronics.
Oil prices for Sep. delivery gained 71 cents to close at $96.68 a barrel.
Gold futures for Dec. delivery rose $19.90 to $1,642.90 an ounce.