Treasury yields fall to near record low; US stocks close flat

(Bond Market Re-Cap for May 23rd, 2012) Yields on 10-year notes dropped to a near record low, pushing Treasury prices higher as talk of Greece’s eventual exit from the 17-member currency zone is gaining steam.

US Treasury Bonds remained higher after an auction in five-year notes drew a record low yield of 0.748 percent. Yield on the benchmark 10-year Treasury tumbled 5 basis points, or 0.05 percentage points, to 1.72 percent.  30-year bond yields slipped 0.08 percentage points to 2.79 percent while the yield on current five-year notes dropped 0.03 percentage points to 0.73 percent.

Bond Funds were up as well with the iShares Barclays 20 Year Treasury Bond ETF (TLT) added 85 cents, or 0.69 percent, to finish at $123.41, while the Vanguard Total Bond Market ETF (BND) gained 6 cents, or 0.07 percent to close at $84.02.

US stocks recovered in the final hour of trading Wednesday after witnessing steep falls with the NASDAQ and the S&P 500 ending in the positive territory even though thoughts there will ultimately be a Greece exit continues to spook the market. Sentiments were fragile over the crisis in the EU region and risk appetite weakened further over lower than-estimated sales and earnings numbers from PC maker Dell.

The Dow Jones Industrial Average (DJIA) slipped 6.66 points, or 0.1 percent, to 12,496.15, after losing 191 points during the day’s trade. PC maker Hewlett Packard Co (HPQ) led the blue-chip’s slide, losing 3.21 percent for the day, after rival company Dell Inc (DELL) reported disappointing revenue forecast late Tuesday afternoon. Dell shares sank 17.18 percent. Wal-Mart (WMT), Bank of America (BAC) and Alcoa (AA) led the winner’s list.

The S&P 500 Index (SPX) rose 2.23 points, or 0.2 percent, to 1318.86 with utilities faring the worst and natural resources rising the most among its 10 industry groups.

The tech-heavy NASDAQ Composite (COMP) added 11.04 points, or 0.4 percent, to close at 2850.12 with Intel Corp (INTC) and Microsoft (MSFT)

For every three stocks gaining, two retreated on the NYSE.

Oil prices for June delivery dropped $1.95 to $89.90 a barrel.

Gold futures for June delivery slumped $28.20 to $1,548.40 an ounce.   

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