Treasuries rally on economy, corporate concerns, US stocks close lower

July 12th, 2012 by

(Bond Market Recap for July 12, 2012) Treasuries rallied as a scramble for safe assets bolstered demand at the government’s $13 billion 30-year Treasury Bond auction, pushing auction yields to a record low as investors remained worried that global central banks are unwilling to take concerted action even though growth is faltering.

The yield on the benchmark 10-year note headed towards record low level, shedding four basis points to close at 1.47 percent despite first-time unemployment benefits dropping to its lowest level in four years. 30-year bond yields dropped five basis points to 2.56 percent in late afternoon trade, New York time.

10 Year Treasury Yield – 1 Month Chart

Bond Funds were also up on the day with the iShares Barclays 20 Year Treasury Bond ETF (TLT) adding 91 cents, or 0.71 percent, to finish at $129.51, while the Vanguard Total Bond Market ETF (BND) gained 16 cents, or 0.19 percent to close at $84.85.

TLT 1 Month Chart

US stocks extended their losing streak Thursday, closing lower for the sixth consecutive day as investors fretted over a global economic slowdown and a disappointing corporate earnings quarter here. The Dow Jones Industrial Average (DJIA) wavered, making brief incursions into the green territory and closing 31.26 points, or 0.3 percent, lower at 12,573.27, after sinking as much as 112 points during the day’s trade. The breadth within the Dow remained negative with 22 of the 30 components sliding. Intel (INTC) and Microsoft (MSFT) were the biggest percentage decliners.  Consumer products giant Proctor and Gamble (PG) rallied 3.7 percent while Merck & Co. (MRK) vaulted 4.1 percent over reports of Merck’s osteoporosis drug odanacatib showing great prospect.

Dow Jones Industrial Average 1 Month Chart

The S&P 500 Index (SPX) lost 6.69 points, or 0.5 percent, to 1352.63, marking its sixth consecutive down day. Utilities and healthcare performed the best while technology and financials were the hardest hit among its 10 business groups.  The tech-laden NASDAQ Composite Index (COMP) slipped 21.79 points, or 0.8 percent, to close at 2866.19, its fifth day of losses.

  • Decliners stayed ahead of gainers with every five stocks losing, eight advanced on the NYSE.
  • Oil prices for August delivery gained 27 cents to close at $86.04 a barrel.
  • Gold futures for August delivery eased $10.40 to finish at $1,565.30 an ounce.
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