Financial Bonds Gain Value While Market Moves Sideways

While the stock market rose today with the Dow Jones Industrial Average reaching a 4 year high, the bond market finished more mixed. While more investment grade issues rose in price than fell, 2323 to 1675, the two major bond ETFs fell slightly in value. The Vanguard Total Bond Market ETF (BND) fell 11 cents to $83.89, down 0.13%

In one area, the bond market mirrored the stock market. Bank and Financial companies, who would suffer greatly if the economy stayed weak, showed gains in both markets. Seven of the ten most actively traded bonds included issues Bank of America (BAC), Goldman Sachs (GS) General Electric Capital (GE), and Citigroup ( C). Only one of the seven issues did not see at least a small gain in value.

Of the remaining three most actively traded bonds, two of the bonds were issued by Petrobras (PBR), the Brazilian oil company. The issue with a 9 year maturity rose in value, while the much longer dated bond maturing in 2041 slightly decreased in value.

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