(Bond Market Update for 5/29/12) US Treasuries fluctuated, seeking direction from the markets as reports from Spain suggested Bankia may require €23.5 billion in bailout money versus an initial €19 billion estimate.
Treasury Bonds changed little over Friday’s close and continued to trade close to record lows as concern over Spain’s ability to recapitalise its troubled banks and prop up the struggling regional economies continued to cast a shadow over investor sentiments. The benchmark 10-year yield remained unchanged at 1.74 percent as of 3.52 pm New York time despite US consumer confidence reading tumbling to lowest level in four months.
10 Year US Treasury Yield – 1 Month Chart
According to Bank of America Merrill Lynch indexes, Treasuries have returned 2.6 percent since end of March while valuation levels have soared to near record levels.
Bond Funds were mixed on the day with the iShares Barclays 20 Year Treasury Bond ETF (TLT) shed 38 cents, or 0.31 percent, to close at $123.02 while the Vanguard Total Bond Market ETF (BND) remained unchanged over Friday’s close.
TLT 1 Month Chart
US stocks gained one percent Tuesday as Greece signaled adhering to the commitments to continue in the single currency zone even as US consumer confidence reading came in softer than anticipated and home prices declined further. Sentiments were buoyed further over hopes that central banks will provide more global stimulus and China would move to support its economy.
The Dow Jones Industrial Average (DJIA) jumped 125.86 points, or 1.01 percent, to 12,580.69, after rising 156.78 points during the day’s trade. Blue-chip component Bank of America (BAC) led the winners list, gaining 4.1 percent for the day while aluminum producer Alcoa (AA) added more than 3 percent.
Dow Jones Industrial Average 1 Month Chart
The S&P 500 Index (SPX) rose 14.60 points, or 1.1 percent, to 1332.42 as all 10 business group surged, lead by materials and tech.
The tech-heavy NASDAQ Composite (COMP) rose 33.46 points, or 1.2 percent, to close at 2870.99. Social networking site Facebook Inc. (FB) slumped 9.6 percent to $28.84 as trading of options began today. The stock is off 24% since its debut two weeks back.
Oil prices for July delivery shed 10 cents to close at $90.76 a barrel.
Gold futures for June delivery eased $20.02 to $1,552.80 an ounce.