Treasuries advance on European debt worries, stocks fallApril 13th, 2012 by David Waring
(April 13th, 2012) Treasuries advanced pushing 10-year yields below the 2 percent mark for the second time this week, as rumors spread on the deteriorating Spanish economy and borrowings by the country’s banks zoomed last month.
US 10-year Treasury Notes ended higher for the fourth straight week, the longest stretch of gains since Aug. China’s lower-than-forecast economic growth fuelled speculations of a global slowdown, pushing Treasuries higher. The Federal Reserve
bought $1.8 billion in assets as part of its monetary expansion programme on Friday. Yields on benchmark 10-year Treasuries dropped by 0.06 percentage points, or six basis points, to 1.99 percent. Yields on 30-year bonds dropped by six basis points to 3.15 percent.
The Vanguard Total Bond Market ETF (BND) gained 0.21 points, or 0.25 percent over Thursday’s close, while the iShares Barclays 20 Year Treasury Bond ETF (TLT) surged 1.86 points, or 1.62 percent.
US stocks retreated Friday following a two-day rally, with the broad market indices recording their worst week this year on worsening European debt-crisis speculations and lower-than-anticipated Chinese growth reading. The major indexes closed lower for the second straight week with the worst declines of the year.
The Dow Jones Industrial Average (DJIA) tumbled 136.99 points, or 1.1 percent, to end at 12,849.59; 1.6 percent lower than the previous week. Dow component JPMorgan Chase (JPM) tanked 3.6 percent despite announcing better-than-expected profits in the first quarter. Wells Fargo (WFC) also sank despite beating street expectations by earning 75 cents a share on $21.6-billion in revenues. Other big banks, including Bank of America (BAC), Morgan Stanley (MS) and Goldman Sachs (GS), which posts results next week, all slipped.
The S&P 500 Index (SPX) dropped 17.31 points, or 1.3 percent, to 1370.26, off 2 percent from the prior week close, with the utilities and consumer staples performing the best and financials and technology faring the worst.
The NASDAQ Composite (COMP) slipped 44.22 points, or 1.5 percent, to finish at 3011.33, down three percent from last week’s close.
Roughly three stocks fell for every stock rising on the NYSE.
Crude futures for May delivery dropped 81 cents to settle at $102.83 a barrel.
Gold futures for June delivery slipped $20.40 to $1,660.20 an ounce.