Bond Market Recap for April 4th 2012

Investors became anxious today over how markets may look without further monetary stimulus from the Federal Reserve, pushing Treasuries higher as demand for safe-haven assets grew.  Treasuries recovered from their biggest drop in nearly three weeks with US ten-year yields dropping 0.07 percent, or 7 basis points, to 2.23 percent as a crisis stricken Spain added to market uncertainty.

The iShares Barclays 20 Year Treasury Bond ETF (TLT) climbed 1.52 points, or 1.37 percent, for the day, while the Vanguard Total Bond Market ETF (BND) gained 0.23 points, or 0.28 percent over Tuesday’s close.

US stocks dropped to their lowest level in nearly a month on Wednesday as a weak Spanish bond sales revived investor worries about the region’s debt crisis.

The Dow Jones Industrial Average (DJIA) dropped 124.8 points, or 1 percent, to 13,074.7 as the market took back some of the gains made during the first quarter. The situation was aggravated further as payroll processing firm ADP reported lower-than-expected rise in private-sector jobs in March. Though Wednesday’s sell-off was across the board, financials led the decline with Citigroup (C), Goldman Sachs (GS), JPMorgan Chase (JPM) and Bank of America (BAC) all shedding more than 2 percent. Shares of General Electric (GE) tumbled following ratings agency Moody’s announcement that it had downgraded the company due to risks associated with GE Capital Corp.

The S&P 500 Index (SPX) lost 14.42 points points, or 1.0 percent, to 1,398.96 with the telecommunications sector advancing the most in the 10-sector index.

The NASDAQ Composite (COMP) capped its worst session in 2012 by shedding 45.48 points, or 1.5 percent, to close at 3,068.09.

Decliners outpaced advancers by six-to-one on the NYSE.

Oil prices tumbled to a seven-week low after US inventories jumped, pushing crude for May delivery to $101.47 a barrel.

Gold futures for June delivery dropped to a 12-week low, off $57.90, to end at $1,614 an ounce.