(Bond Market Wrapup for June 27th 2012) Treasuries were little changed after the Fed auctioned $35 billion in five-year notes that generated the lowest demand in nearly a year. Even with lackluster demand however yields remained less than a quarter percentage point above record lows ahead of an European summit meeting in Brussels tomorrow.
The yield on current five-year notes remained unchanged at 0.72 percent in late afternoon trading while yields at today’s auction traded at 0.752 points with a bid-to-cover ratio of 2.61, the least since last July. The benchmark 10-year yield declined less than one basis point, or 0.01 percentage point, to 1.62 percent. Yields had climbed yesterday on speculation whether EU leaders were making progress over the ongoing debt crisis. The yield on 30-year Treasury Bonds dropped one basis point to 2.69 percent after durable-goods order rose 1.1 percent in May; the first monthly gain in three and a report from the National Association of Realtors showed the index of pending home re-sales climbed 5.9 percent against the projected 1.1 percent.
10 Year Treasury Yield 1 Month Chart
Bond Funds were up slightly on the day with the iShares Barclays 20 Year Treasury Bond ETF (TLT) adding 20 cents, or 0.16 percent, to $126.54, while the Vanguard Total Bond Market ETF (BND) gained 9 cents, or 0.11 percent to close at $84.35.
TLT 1 Month Chart
US stocks extended gains for the second day Wednesday following stronger than expected reports on housing and during goods and lack of negative headlines from Europe. The Dow Jones Industrial Average (DJIA) zoomed 92.34 points, or 0.74 percent, to 12,627.01, after rising as much as 112 points during the day’s trade. The blue-chip index has gained in two sessions in three and recovered nearly all the losses suffered Monday. 24 of the 30 components rose for the day with JP Morgan (JPM), Bank of America (BAC) and General Electric (GE) leading the gainers. Heavy equipment maker Caterpillar (CAT) and fast food giant McDonald’s (MCD) retreated the most.
Dow Jones Industrial Average 1 Month Chart
The S&P 500 Index (SPX) rose 11.86 points, or 0.9 percent, to 1331.85 with energy companies fronting the gainers list among its 10 business groups. The tech-heavy NASDAQ Composite (COMP) added 21.26 points, or 0.7 percent, to close at 2875.32.
For every stock declining, more than three advanced on the NYSE.
Oil prices for August delivery gained 15 cents to close at $79.36 a barrel.
Gold futures for April delivery rose $3.50 to $1,578.40 an ounce.