Dow Jones: Investors opt for security
NEW YORK MARKET
Sunday 20 September 1998
The 30-year bond yield fell to 5.15 per cent - not far from the record low of 5.13 per cent reached the previous week. "By the end of next year, the long bond yield will be a full percentage point lower," said Thomas Carpenter at ASB Capital Management. "My guess is that we'll see deflation" as Asia's economic slowdown spreads to the US, he said.
US stocks rose four days out of five last week as gains in telephone, tobacco and beverage shares offset declines in companies whose fortunes depend on a growing economy.
"There is a move to security and safety," said David Bayer at Knappenberger Bayer Management.
The Dow Jones Industrial Average rose 1.28 per cent to 7,895.66. It marked the first time since June that the Dow average managed four days of gains in a week. The S&P 500 rose 1.1 per cent and the Nasdaq Composite 1.4 per cent.
The Dow "is down about 15 per cent from its highs, and some people are thinking that while valuations aren't cheap, they are the cheapest they have been for some time," said Ted Bridges at Bridges Investment Counsel.
Traders attributed a late-day rise on Friday to the simultaneous expiration of futures and options on US stock indices and options on individual stocks.
"It's an expiration rally," said Peter Coolidge at Brean Murray. "I wouldn't read too much into it."
Thirty-year Treasury yields have tumbled about 90 basis points since April as investors sought the world's safest securities while global economies faltered and stocks fell.
So far this year, 30-year bonds have handed investors returns of more than 15 per cent. That compares to a gain of 1 per cent for the Dow.
Investors snapped up shares in telephone and tobacco companies, which tend to perform relatively well during economic declines. Cyclical stocks such as Dow Chemical Co, which perform best in times of economic growth, declined.
Some investors were reluctant to buy ahead of a weekend because of the precarious financial condition of Japan and Latin America. Also, many Wall Street traders and investors will observe the Jewish holidays on Monday and Tuesday.
- 1 President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
- 2 Doctors remove 80 teeth from boy's jaw
- 3 The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
- 4 Sir Winston Churchill’s family begged him not to convert to Islam, letter reveals
President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
Downfall of Dustin 'Screech' Diamond, the 'Saved By The Bell' star charged with bar stabbing
Syrian teenager Usaid Barho reveals how he escaped from Isis using a suicide vest
Sir Winston Churchill’s family begged him not to convert to Islam, letter reveals
Millions of Britons struggling to feed themselves and facing malnourishment
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Nigel Farage: Ukip leader named 'Briton of the year' by The Times
Douglas Carswell tells Ukip to stop blaming foreigners as youth poll shows Nigel Farage is even less popular than Nick Clegg
iJobs Money & Business
Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...
Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...