(Bond Market Update for July 24th, 2012) Treasuries rose as yields on five-, 10- and 30-year government securities fell to record new lows for the second consecutive day after rating’s agency Moody’s changed outlook on Germany to negative from stable stating Berlin may have to underwrite further loans for its weaker neighbors.
The yield on benchmark 10-year Treasury notes dropped two basis points to 1.40 percent in late afternoon trading, New York time, bouncing off from the day’s low of 1.3925 percent. 30-year treasury bond yields dropped four basis points to 2.47 percent after a Reuters report said EU officials anticipate Greece missing deficit-reduction targets attached to its bailout funding, increasing the allure of safest assets.
10 Year Treasury Yield – 1 month Chart
Bond Funds were up as well as the iShares Barclays 20 Year Treasury Bond ETF (TLT) gained $1.03 points, or 0.79 percent, to close at $131.82, while the Vanguard Total Bond Market ETF (BND) added 10 cents, or 0.12 percent over Monday’s close, finishing at $85.30.
TLT 1 Month Chart
US stocks extended losses, closing lower for the third straight day amid a spate of recent disappointing corporate earnings and uninspiring economic reports at home and renewed worries about Greece at a time when Spain and Italy are running into trouble. The Dow Jones Industrial Average (DJIA) lost 104.14 points, or 0.8 percent, to 12,617.32, recording its first three digit losses in three consecutive sessions since last September. Within Dow, the breadth remained negative with 26 of the 30 components closing lower. Cisco Systems (CSCO) was the blue-chip index’s biggest percentage loser, shedding 5.9 percent for the day while Home Depot (HD) and JP Morgan Chase (JPM) ended in the positive territory.
Dow Jones Industrial Average 1 Month Chart
The S&P 500 Index (SPX) slipped 12.21 points, or 0.9 percent, to 1338.31. All the 10 business sectors closed lower with energy and telecom faring the worst. The NASDAQ Composite (COMP) lost 27.16 points, or 0.9 percent, to close at 2862.99 with its largest component Apple Inc (AAPL) sliding 0.5 percent ahead of its quarterly result late Tuesday.