Treasuries fall amid weak demand, US stocks dropMarch 28th, 2012 by David Waring
Treasuries slid for the second day as demand remained the least in seven months and investors questioned if the economy requires another round of monetary stimulus by the Fed.
The yield on current five-year notes rose 0.02 percentage points, or two basis points, to 1.04 percent as demand was the weakest weakest at an auction since Aug. At the $35 billion securities sale, the bid-to-cover ratio dropped to 2.85 from the 10-auction average of 2.91. Bank of America Merrill Lynch indexes showed five-year notes dropped 0.7 percent in March. Yields on 10-year benchmark notes also rose two basis points to 2.20 percent.
The iShares Barclays 20 Year Treasury Bond ETF (TLT) shed 0.16 points, or 0.14 percent, for the day, while the Vanguard Total Bond Market ETF (BND) lost 0.02 points, or 0.02 percent over Tuesday’s close.
US stocks slipped Wednesday, extending losses for the second day as global growth worries took center-stage after US durable goods orders came in weaker than expected. Investors dumped energy and materials related stocks as commodities took a big hit; copper and oil roughly fell by 2 percent while gold dipped more than a percent.
The Dow Jones Industrial Average (DJIA) sank 71.52 points, or 0.5 percent, to 13,126.21, still up 0.4 percent over last Friday’s close. Heavy OEM Caterpillar (CAT) tanked 3.5 percent, the biggest drop in percentage terms and points. Aluminum producer Alcoa Inc (AA) fared the second worst, losing 2.3 percent on the day.
The S&P 500 Index (SPX) shed 6.98 points, or 0.5 percent, to 1,405.54 with the materials and energy sectors in the 10-component index dropping the most. Pentair Inc (PNR) jumped 15 percent while Tyco International Ltd (TYC) rose 4.26 percent after the two firms announced creation of a new entity by merging their flow control businesses. Sears Holdings (SHLD) dropped the most, losing 6.1 percent for the day. Metals companies Allegheny Technologies Inc. (ATI) and Freeport McMoRan (FCX) were among the day’s biggest losers.
The tech-heavy NASDAQ Composite (COMP) slipped 15.39 points, or 0.5 percent, to close at 3,104.96.
For every stock advancing, two stocks declined on the NYSE.
Average gas prices crossed the $3.90 a-gallon mark Wednesday and are now a dime away from the $4 threshold following 19 consecutive hikes.
Oil futures for May delivery dropped $1.92 to close at $105.41 a barrel after US government announced a surprisingly large gain in weekly inventories.
Gold futures for April delivery tumbled $27 to $1,657.90 an ounce.