Stocks Post Modest Gains as Treasurys Tumble
The blue-chip Dow Jones Industrial Average ($INDU) rose 13 points, or 0.1%, to close at 11,372. The broader S&P 500 ($INX) gained 5 points, or 0.4%, to finish at 1,228. The tech-heavy Nasdaq Composite ($COMPX) added 11 points, or 0.4%, to finish at 2,609.
The sell-off in the bond market was in focus once again Wednesday, as the yield on the benchmark 10-year Treasury note rose to its highest intraday level since June. Bond prices, which move in the opposite direction of yield, came under pressure ahead of ahead of mildly disappointing Treasury auction of 10-year notes that raised $21 billion at a yield of 3.34%. The yield on the 10-year Treasury closed at 3.23%. To put that in perspective, the yield was as low as 2.38% on Oct. 5.
No Time for Heroics
Bond bull David Rosenberg, chief economist and strategist at Gluskin Sheff, said much of the rise in bond yields appears to be related more to year-end fund flows rather than any meaningful change in the macroeconomic landscape.
"Strange things can happen at this time of the year as the books get closed," Rosenberg wrote in a note to clients. "No sense being a hero, and no sense being greedy. While a nice [bond] buying opportunity is being set up, a nicer one may still await in the next few weeks as the oversold condition in the bond market becomes really oversold."
Said Rosenberg: "The [drop in gold and commodities prices] may be a reaction to growing concerns that more policy tightening
is coming in China, which is surely the case."