(Bond Market Wrapup for September 4th, 2012) Treasuries retreated as yield on 10-year notes bounced off record lows in almost a month after media reports suggested ECB President Mario Draghi said the bank’s plan to intervene in the short-term bond market doesn’t violate present EU rules while appearing before a European Parliament committee.
The benchmark 10-year Treasury note rose two basis points, 0.02 percentage points, to 1.57 percent in late afternoon trade, New York time after falling to 1.54 percent earlier as the Institute for Supply Management’s US manufacturing index showed the benchmark shrank for the third straight month in August. Yield on 30-year Treasury bonds rose one basis point to 2.68 percent.
10 Year Treasury Note – 1 Month Chart
Bond Funds were down on the day with the iShares Barclays 20 Year Treasury Bond ETF (TLT) shedding 40 cents, or 0.31 percent, to close at $127.32 while the Vanguard Total Bond Market ETF (BND) lost 24 cents, or 0.28 percent to finish at $84.94.
TLT 1 Month Chart
US stocks finished September’s first session mixed as hopes the European Central Bank will intervene to halt the debt crisis tempered investors concern over weak US manufacturing data. The Dow Jones Industrial Average (DJIA) closed 54.90 points, or 0.4 percent, lower at 13,035.94, recovering from 113.75 point drop. Breadth within the Dow turned negative with decliners outpacing gainers 19-to-11. Alcoa (AA), Microsoft (MSFT) and Caterpillar (CAT) were among the biggest percentage decliners. Wal-Mart (WMT) and Kraft Foods were among the biggest gainers.
Dow Jones Industrial Average – 1 Month Chart
The S&P 500 Index (SPX) lost 1.64 points, or 0.1 percent, to 1404.94 with telecommunications and consumer staples pacing the gainers among its 10 business groups. Apple Inc (APPL) jumped 1.5 percent amid speculation the company is close to launch its so-called iPhone 5 with a larger screen and a thinner body. The California-based company, accounting for 4.89 percent of the index, has added $250 billion into shareholder accounts since January this year. Extending its winning streak from last week, the NASDAQ Composite (COMP) added 8.1 points, or 0.3 percent, to close at 3075.06. Apple contributes more than 13 percent in the tech-heavy index.