Treasuries rise to three-month high after jobs data, stocks tumble

(May 4th, 2012) Treasury Bonds advanced, pushing yields to a fresh three-month low amid speculations that the Federal Reserve may consider restarting monetary stimulus measures in June to prop up a stagnating economy.  US Government Bonds are heading for a seventh consecutive weekly gain, the longest stretch since the height of the financial crisis in 2008.

The benchmark yield of 10-year Treasuries dropped 0.06 percentage points, or 6 basis points, to 1.87 percent, the lowest level since Feb 3. Yield on 30-year bonds dropped 4 basis points, or 0.04 percentage points, to 3.07 percent after an initial Labor Department report showed US employers added 115,000 jobs in April versus 154,000 in the prior month.

The iShares Barclays 20 Year Treasury Bond Fund (TLT) rose 92 cents, or 0.78 percent, to $118.14, while the Vanguard Total Bond Market ETF (BND) gained 9 cents, or 0.11 percent to close at $83.94.

US stocks fell sharply on the last trading day of the week on the back of a selloff after a report showed employers added fewer than estimated jobs in April, sending the S&P 500 and the NASDAQ Composite to their lowest level in 2012. Sentiments were further hampered by the upcoming French elections on Sunday, where Socialist candidate Francois Hollande stands a good chance of defeating incumbent president Nicholas Sarkozy.

The Dow Jones Industrial Average (DJIA) tumbled 168.32 points, or 1.3 percent, to settle at 13,038.27, off 1.4 percent for the week. All the stocks of the 30-component index closed lower, with both Cisco Systems Inc (CSCO) and Bank of America Corp (BAC) losing more than 3 percent for the day. Greece goes to polls this weekend to elect a new parliament while France is due to hold the second round of presidential elections.

The S&P 500 Index (SPX) shed 22.47 points, or 1.6 percent, to 1369.10 with energy falling the hardest and utilities the only sector to post a gain among the 10 business groups. Progress Energy Inc (PGN) advanced the most after Q1 earnings beat street estimates.

The tech-heavy NASDAQ Composite Index (COMP) slumped 67.96 points, or 2.3 percent, to close at 2956.34, the highest single-day and weekly loss since Nov end. Apple Inc (AAPL), the index’s biggest component, plummeted 6.3 percent for the week, its biggest drop since October. However, social-networking site LinkedIn Corp. (LNKD) soared 7.2 percent after the firm raised its guidance for the year.

For every three stock declining, one stock advanced on the NYSE.

Oil prices for June delivery plummeted to $98.56, off 4 percent for the day.

Gold futures for June delivery rose $10.40 to $1,645.20 an ounce.