Bond Rally Lifts Stocks To Records --- Yield Drops to 6.322% On U.S. 30-Year Issue, Delighting Investors
The continuing rally in Treasury bonds drove stocks to new highs.</br></br>The Dow Jones Industrial Average jumped 80.36 points to a record 8254.89 while Standard & Poor's 500-stock index rose 10 points to a record 952.29. The Nasdaq Composite Index surged 15.73 to a record 1588.05 as technology stocks shook off their recent malaise.</br></br>With the yield on the Treasury's benchmark 30-year bond falling to 6.322%, the lowest level this year, stock-market investors were ebullient. The bond's price rose 25/32 point, or $7.81 for each $1,000 in face amount, to 103 29/32.</br></br>"When the bond market is happy, the stock market is ecstatic," says Bill Meehan, a market analyst at Prudential Securities.</br></br>Further interest-rate declines may follow today's release of data on second-quarter gross domestic product. The market consensus calls for an annualized gain of 1.9%, a far cry from the torrid pace of economic growth seen in the first quarter, when GDP soared at an annualized 5.9% pace. Any figure falling below that consensus estimate could trigger another sharp rally in both stocks and bonds, traders say.