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Bonds suffer as stocks soar
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April 22, 1999: 3:48 p.m. ET
Wall Street's profit is bond market's loss, while Sprint offering adds to the pain
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NEW YORK (CNNfn) - Bond traders scrambled Thursday to get out of the way of a surging stock market and competition from an incessant stream of non-Treasury debt, leaving the long bond down more than a full point.
Shortly before 3:00 p.m. ET, the benchmark 30-year Treasury bond had fallen 1-5/32 points in price to 94-26/32. The yield soared to 5.60 percent for the first time in nearly three weeks.
Traders said investors were selling off in the wake of a renewed rally on Wall Street, where electrifying earnings from market heavyweight IBM (IBM) pushed blue-chip stocks into fresh record territory.
Richard Gilhooly, bond market strategist at Paribas, confirmed this impression, saying that bonds had little news of their own to inspire buying and were instead moving down as investment funds loaded additional cash into the stock market.
Mid-morning comments from Federal Reserve chief Alan Greenspan and Treasury undersecretary Lawrence Summers had almost no effect on the bond market other than stifling early trading as many players retreated to the sidelines.
Meanwhile, burgeoning supply of corporate debt offerings kept the Treasury market off balance. The morning's pricings were relatively minor, led by a $400 million offering of 10-year Aa3/AA- debt from chemical giant DuPont (DD), but a midday announcement that Sprint (FON) will launch $3 billion in debt spooked bond traders still reeling from last week's heavy corporate calendar.
Dollar stumbles
The bond market got no support from the dollar, which retreated from its overnight highs as traders took some profits from the U.S. currency's recent advance.
As a result, the euro managed to put lingering concerns of weak European growth prospects and NATO's armed intervention in the Balkans behind it, climbing off lifetime lows hit overnight to trade at $1.0613.
The dollar also faltered against the yen, slipping to 119.55 yen after pushing past the 120-yen level overnight for the first time in over a week.
Traders said dollar support was faltering ahead of next week's meeting of the Group of Seven (G7) industrialized nations, which is likely to bring veiled comments from European, Japanese and U.S. economic officials about desirable exchange levels.
Meanwhile, as Brown Brothers Harriman put it in a published statement, the dollar was trading with little direction in the absence of any major U.S. economic data. 
-- by staff writer Robert Scott Martin
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