Bond Yields Rise in Weak Treasury Auction

123jump.com Staff
25 Mar, 2010
New York City

U.S. stocks lost early gains at close and U.S. Treasury bond yield increased for the second day this week. Treasury auction of 7-year note of $32 billion was disappointing. The dollar advanced after the ECB President Trichet criticized the IMF involvement in Greece bailout.

[R]4:50 PM New York – U.S. stocks lost early gains at close and U.S. Treasury bond yield increased for the second day this week. Treasury auction of 7-year note of $32 billion was disappointing. The dollar advanced after the ECB President Trichet criticized the IMF involvement in Greece bailout.[/R]

U.S. stocks traded higher after jobless claims declined but gave up most of the gains of the day. The 10-year bond yields traded at 3.88% and the dollar advanced after the ECB President Jean Claude Trichet said that an aid from the IMF is “very, very bad.”

The euro closed higher in Frankfurt but declined in New York trading after EU leaders appear to endorse bilateral loans and support from the IMF for Greece. European Central Bank President Trichet backtracked from his earlier support for a Greek bailout that involved the IMF and said that the region should take responsibility of its members.

Fed Chairman Bernanke told U.S. lawmakers that the central bank is prepared to reduce its asset holding at the appropriate time from $2.31 trillion to under $1 trillion. He also said that the fragile economic recovery requires low interest rates and noted that housing market and jobs market is still weak.

Dubai government offered $9.5 billion support to Dubai World, easing concerns of a default.

Best Buy Co. soared after it reported higher than expected sales and net income in the fourth quarter. ConAgra Foods declined after quarterly sales softened 1%. Citigroup Inc added after U.S. Treasury prepares to sell its 27% stake. Caterpillar and Deere book higher healthcare costs.

European markets closed higher after Germany and France workout an agreement to support Greece with the help from the IMF. European leaders agree on the need to involve the IMF and offer bilateral assistance to Greece. Greek bonds gained and the euro advanced against the dollar the pound.

Hermes International fourth quarter sales surged 11% but annual earnings edged lower. Hochtief AG soared on a 25% rise in net income.

UK stocks closed higher after February retail sales were ahead of expectations and surged the most in seventeen months. Thomas Cook gained on higher summer bookings. Next Plc soared on better than expected sales and earnings. Clinton Cards Plc forecasted higher annual sales.

Mumbai investors showed higher risk appetite despite elevated wholesale inflation. Reserve Bank of India is increasingly likely to raise rates and sacrifice growth in the short term. Kuwait based Zain is near agreement to sell its African mobile telecom business to Bharti Airtel.

Japan’s Prime Minister Yukio Hatoyama showed his willingness to discuss the increase in consumption pledge. He had focused his campaign on lowering taxes and eliminating wasteful spending. Steelmakers in Japan face as much as 100% hike in iron ore price from Brazil shipments.

Reserve Bank of Australia noted the commercial real estate loan losses are a significant concerns but bank profits are expected to be on the rise. The central bank official also noted in a separate statement that inflation is likely to decline in the coming months. Woodside Petroleum denies Santos acquisition talks.

North American Markets

Dow Jones Industrial Average increased 5.06 or 0.05% to close at 10,841.21, S&P 500 Index edged lower 1.99 or 0.2% to 1,165.73 and Nasdaq Composite Index declined 1.35 or 0.06% to close at 2,397.41. Toronto TSX Composite Index fell 4.86 or 0.04% to 11,958.11.

Latin American Markets Indexes

Mexico Bolsa Index increased 3.36 or 0.01% to 33,164.33 and Brazil Bovespa Stock Index decreased 471.74 or 0.7% to 68,441.66.

Europe Markets Review

In London FTSE 100 Index closed higher 49.77 or 0.88% to 5,727.65, in Paris CAC 40 Index increased 50.67 or 1.28% to close at 4,000.48, in Frankfurt DAX index higher 93.95 or 1.56% to close at 6,132.95. In Zurich trading SMI increased 14.22 or 0.21% to close at 6,894.17.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 13.82 or 0.13% to 10,828.85, and Hang Seng index in Hong Kong decreased 230.07 or 1.10% to 20,778.55, and CSI 300 index in China lower 47.54 or 1.45% to 3,229.13. ASX 200 index in Australia decreased 6.10 or 0.12% to 4,885.40. The FTSE Bursa KL Composite index in Malaysia was higher 3.03 or 0.23% to 1,312.48.

The Kospi Index in South Korea increased 7.38 or 0.44% to close at 1,688.39. SET index in Thailand closed lower 2.16 or 0.27% to 784.38. JSE Index in Indonesia increased 24.30 or 0.88% to 2,799.15. The Sensex index in India increased 107.83 or 0.62% to 17,568.85.

Commodities, Metals, and Currencies

Crude oil decreased $0.34 to $80.27 a barrel for a front month contract, natural gas edged down 13 cents to $3.98 per mBtu and gasoline decreased 0.92 cents to 221.20 cents.

Soybean future closed down 17.50 cents to $9.42 a bushel. Wheat futures decreased 9.50 cents in Chicago trading to $4.66 a bushel. Sugar closed down 0.62 cents at 17.05 cents per pound.

Gold increased $2.70 in New York trading to close at $1,092.60 per ounce, silver closed down $0.0011 to $16.64 per ounce and copper for the front month delivery decreased 0.65 cent to $3.35 per pound.

Dollar closed higher against euro to $1.328 and advanced against the Japanese yen to 92.73.

Yield on 10-year U.S. bonds closed higher at 3.88% and with 30-year maturities increased at 4.76%.