Treasuries Gain for the Ninth Week, US Stocks Extend Losses

(Bond Market Update for May 18th, 2012) The benchmark 10 year treasury remained near flat after getting close to a record low ahead of a $99-billion coupon-bearing debt auction next week.

Yield on 10-year notes rose 1 basis point, or 0.01 percentage point, to 1.71 percent, down 11 basis points for the week. The yield had dropped to 1.6937 percent during the day’s session, approaching the record 1.6714 set on Sep 23.

Bond Funds were mixed with the iShares Barclays 20 Year Treasury Bond ETF (TLT) adding 3 cents, or 0.02 percent, to close at $124.20, while the Vanguard Total Bond Market ETF (BND) slipped 5 cents, or 0.06 percent to finish the week at $84.09.

US stocks closed lower on Friday with the Dow and the S&P extending losses for the third straight week. Despite social networking site Facebook’s (FB) much hyped public debut, shares barely rose above the offering price as investors remained worried about Greece’s continuation in the European Union.

The Dow Jones Industrial Average (DJIA) fell 73.11 points, or 0.6 percent, to finish the week at 12,369.38, its 12th down day in the last 13 trading sessions. The blue-chip index is now off 3.5 percent for the week and has lost 6.4 percent for the month.  The S&P 500 Index (SPX) shed 9.64 points, or 0.7 percent, to 1295.22 with telecommunications rising the most and healthcare faring the worst among the 10 industry groups. Yahoo Inc (YHOO) jumped 3.7 percent after reports suggested that the internet portal may successfully end a contentious relationship with Alibaba. Salesforce.com (CRM) spiked 8.8 percent after the software provider reported better-than-expected profits and upgraded guidance for 2012.

The tech-heavy NASDAQ Composite Index (COMP) tumbled 34.90 points, or 1.2 percent, to close at 2,778.79, down 5.3 percent for the week.  Decliners outpaced advancers 3-to-1 on the NYSE.

Oil prices for June delivery dropped $1.08 to $91.48 a barrel.

Gold futures for June delivery gained $17.80 to close at $1,591.90 an ounce for the week.